Georgia Manufacturing Remains Strong In March

 Donald Sabbarese
Donald Sabbarese

KENNESAW, Ga. (Apr 3, 2016) — Georgia manufacturing’s new orders and production drove the Georgia PMI 9 points above its six-month average, according to the Purchasing Managers Index released on April 1 by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business.

March’s PMI of 66.7 is a 5.1 point jump from February’s reading of 61.6, once again related to strong improvement in new orders and a high level of production. New orders increased 5.4 points to 73.8 and production decreased 0.1 points to 76.2. Employment increased 6.9 points to 59.5. Supplier delivery also increased 12.2 points to 59.5, which means there is a slowdown in delivery due to increased demands.

It’s still not clear if this level of activity is sustainable over a longer period of time. As noted last month, new orders and production tend to be the most volatile from month to month, in addition, readings above 70 tend to be less sustainable in the long term, according to Don Sabbarese, director emeritus of the Econometric Center and professor of economics at KSU.

The National PMI reading of 51.8 is an increase of 2.3 points for March. The National report identified 12 industries expanding versus nine of 18 industries in February.  March was the first month dating back to October 2015 for a reading above 50.

Summary of highlights from the March PMI:

  • New orders were up 5.4 points to 73.8, which was 15 points above its six-month average.
  • Production was down 0.1 points to 76.2, which was 15.3 points above its six-month average.
  • Employment was up 6.9 points to 59.5 points, which was 5.5 points above its six-month average.
  • Supplier delivery was up 12.2 points to 59.5, which was 6.4 points above its six-month average.
  • Finished inventory was up 1.1 points to 64.3 points, which was 5.6 points above its six-month average.
  • Commodity prices were up 11 points to 45.2, which was 8.9 points above its six-month average.

The Georgia PMI provides a snapshot of manufacturing activity in the state, just as the monthly PMI released by the Institute for Supply Management provides a picture of national manufacturing activity. A PMI reading above 50 indicates that manufacturing activity is expanding; a reading below 50 indicates it is contracting.