Manufacturing Across The SouthEast Sees Promising Growth In October

DOnald Sabbarese
Don Sabbarese

KENNESAW, Ga. (Nov 6, 2015) — Southeast manufacturing activity continued to improve in October, driven by higher new orders and production. October registered 5.4 points higher than the recent low mark of 48.8 in August, according to the Southeast’s Purchasing Managers Index (PMI) report released today by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business.

October’s Southeast PMI jump was based on the strength of new orders and production. Both saw increases, with readings up 7.6 and 8.6 points respectively since August. Employment was the only PMI component to see a decrease this month, dropping 5.3 points to 52.9. While this decrease is notable, employment is still 2.9 points higher than the August reading of 50.

According to Don Sabbarese, director emeritus of the Econometric Center and professor of economics at Kennesaw State University, the October rebound demonstrated some unexpected strength, given the weaker readings for other manufacturing sector readings.

“The National PMI remains flat at 50.1 with a 0.1 decrease barely in the range for growth,” said Sabbarese. “The National PMI’s underlying employment and finished inventory components weakened October as a whole.”

Six Southeastern states — Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee — are included in the Econometric Center’s monthly regional report. Four of the six experienced higher PMI readings.

Highlights of the October Southeast PMI include:

  • New orders increased 4.7 points to 56.7, 4.2 points above its six-month average
  • Production increased 3.6 points to 57.7, 2.3 points above its six-month average.
  • Employment decreased 5.3 points to 52.9, 2.8 points below its six-month average.
  • Supplier delivery time increased 2.9 points to 52.9, 1.3 points above its six-month average.
  • Finished inventory increased 6.1 points to 51 points, 2.4 points above its six-month average.
  • Commodity prices increased 4.7 points to 40.4, 3.5 points below its six-month average.

The Southeast PMI reading is a composite of five variables — new orders, production, employment, supply deliveries and finished inventory. A sixth variable, commodity prices, is compiled by the Coles College’s Econometric Center but does not go into the PMI calculation.

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For more information on the Southeast PMI or to talk with Sabbarese, call 470-578-6094.

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