KSU: Georgia manufacturing falls to six-month low in August

 Don Sabbarese
Don Sabbarese

KENNESAW, Ga. (Sep 2, 2015)

Georgia manufacturing dropped 8.3 points to 45.9 in August, according to the Purchasing Managers Index released today by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business.

“The latest numbers indicate that manufacturing in Georgia is no longer expanding, and is in fact contracted in August,” the school reported. “New orders and production remained weak for the second consecutive month, each falling below 50. New orders were driven down as the percent of respondents reporting higher new orders slipped from 50 percent in June, to 39 percent in July, to 22 percent in August.”

A PMI reading above 50 indicates that manufacturing activity is expanding; a reading below 50 indicates it is contracting.

Employment also dropped due to two consecutive months of slow production.

“Since June, the percent of respondents reporting higher production levels fell from 50 to 19 percent,” the school said. “This drop off is consistent with a drop in respondents reporting expected higher production in the next three to six months from 42 percent in July to 37 percent in August.”

Don Sabbarese, director emeritus of the Econometric Center and professor of economics at Kennesaw State University, said manufacturing has been weaker and more volatile in the last four months.

“This is consistent with the mixture of positive and negative data on a broader economic level,” Sabbarese said in a statement. “This volatility creates uncertainty and has made it more difficult to identify a clear trend going forward.”

Highlights from the August PMI:

  • New orders down 11.3 points to 44.4
  • Production down 20.9 points to 42.6
  • Employment down 11.5 points to 48.1 points
  • Supplier delivery up 3.8 points to 51.9
  • Finished inventory down 1.6 points to 42.6 points
  • Commodity prices down 20.5 points to 33.3