Georgia manufacturing remains sluggish in June

Don Sabbarese

KENNESAW, Ga. (Jul 1, 2016) — National PMI shows improvement as Georgia PMI struggles

Georgia manufacturing saw its second consecutive month in decline, according to the Purchasing Managers Index (PMI) released today by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business.

June’s PMI of 49.3 fell below 50, the minimum benchmark for growth for the second month. This decline has been driven by anemic new orders and downward adjustments for production and employment.

Higher monthly employment fell from 31 percent in April down to 6.7 percent in June. Lower monthly employment rose from April’s 6.3 percent to 13.3 percent in June. Higher reported production fell from March’s 52.4 percent to June’s 26.7. Higher new orders in March of 47.6 percent fell to 26.7 percent in June.

“Although there are some recent positive signs of improved consumer spending it apparently has yet to reach Georgia manufacturers,” said Don Sabbarese, director emeritus of the Econometric Center and professor of economics at Kennesaw State University.

One third of respondents reported lower new orders and production, while only 6.7 percent reported increased hiring. June’s new orders, production, and employment registered 11.2, 14.1, and 8.1 points below their six-month averages.

The National PMI reading of 53.2 is an increase of 1.9 points for June. The National report identified 13 industries expanding in June versus 12 for May. June’s PMI registered increases for all five of its underlying variables.

Summary of highlights from the June PMI:

  • New orders up 2.9 points to 46.7, 11.2 points below its six-month average
  • Production down 9.6 points to 46.7, 14.1 points below its six-month average
  • Employment down 12.7 points to 46.7 points, 8.1 points below its six-month average
  • Supplier delivery up 13.3 points to 63.3, 9.9 points above its six-month average
  • Finished inventory up 5.8 points to 43.3 points, 11.8 points below its six-month average
  • Commodity prices up 4.0 points to 63.3, 13.4 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.

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For a full report of the June PMI or to speak with Don Sabbarese, call 470-578-3481