Manufacturing across the Southeast picks up in June

Don Sabbarese

KENNESAW, Ga. (Jul 6, 2016) —  

After weak May numbers, boost in production a positive sign

Southeast manufacturing rebounded from May’s low, with a PMI reading of 51.8, 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.

Manufacturing still remains well below the March and April readings of 60.6 and 61.1, but June’s uptick is a positive sign. Southeast manufacturing activity increased 3 points based primarily on increased employment and production.

34 percent of respondents reported higher production, 26.3 percent reported increased hiring.  These increases are consistent with an increase to 39 percent from 28 percent of respondents expecting higher production in the next 3 to 6 months.

June’s readings still register well below their six-month averages, with new orders showing slow growth. New orders, production, and employment are 10.8, 7.9, and 0.7, respectively, below their six-month averages. Only supplier delivery time registered 3 points above average, according to Don Sabbarese, director emeritus of the Econometric Center and professor of economics at Kennesaw State University.

“The National PMI increased 1.9 points to 53.2,” said Sabbarese. “All its underlying components improved for June. New orders, production, employment, supplier delivery time, and finished inventory increased.”

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 June Southeast PMI include:

  • New orders increased 0.9 points to 47.4, 10.8 points below its six-month average
  • Production increased 5.0 points to 52.6, 7.8 points below its six-month average
  • Employment increased 1.8 points to 55.3, 0.7 points below its six-month average
  • Supplier delivery time increased 1.9 points to 55.6, 3.0 points above its six-month average
  • Finished inventory increased 5.5 points to 47.4 points, 4.7 points below its six-month average
  • Commodity prices decreased 2.6 points to 57.9 points, 6.8 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.