SouthEast Manufacturing On Track For Solid Growth

Donald Sabbarese
Donald Sabbarese

KENNESAW, Ga. (Mar 4, 2016) — Southeast-manufacturing activity increased 3.1 points to 58.4 in the month of February, 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.

February’s PMI increase to 58.4 is its highest reading since March 2015. The PMI saw increases in four of the five variables, including new orders, production, employment and finished inventory. New orders and production increased 3.4 and 11 points, respectively. Employment and finished inventory increased 1.4 and 1.3 points, respectively.

The solid growth across variables signals an improved trend that may be sustainable throughout 2016. This is an early signal that manufacturing may have turned the corner from its weak performance in the second half of 2015, according to Don Sabbarese, director emeritus of the Econometric Center and professor of economics at Kennesaw State University.

The National PMI also saw growth in February, but continues to lag behind the Southest.

“The National PMI increased 1.3 points to 49.5,” said Sabbarese. “National production, employment, and finished inventory increased 2.6, 2.6 and 1.5 points, respectively. National new orders did not change. The Southeast continues to operate at a much higher growth rate than the National.”

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 February Southeast PMI include:

  • New orders increased 3.4 points to 62.2, 6.6 points above its six-month average
  • Production increased 11 points to 68.9, 12.1 points above its six-month average
  • Employment increased 1.4 points to 53.3,  1.6 points below its six-month average
  • Supplier delivery time decreased 1.4 points to 46.7, 4.1 points below its six-month average
  • Finished inventory increased 1.3 points to 61.1 points, 7.1 points above its six-month average
  • Commodity prices increased 4.8 points to 41.1 points, 3.7 points above its six-month average

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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.


For more information on the Southeast PMI or to talk with Sabbarese, call 470-578-3481.