KENNESAW, Ga. | Dec 3, 2015

Southeast manufacturing activity slightly improved in November by .4 to 54.6, 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.

The fractional increase for November keeps overall manufacturing flat despite a drop in new orders and production of 2.7 and 5.7 points. While other components dropped, employment, supplier delivery time, and finished inventory all saw increases of 3.1, 4.1 and 3.0, respectively.

Employment’s improvement in the face of declining new orders and production suggests that manufacturers may not anticipate future weakness from new orders. 40 percent of respondents, up from 30 percent in October, expect production to increase in the next three to six months. This may explain the increase in November’s employment.

According to Don Sabbarese, director emeritus of the Econometric Center and professor of economics at Kennesaw State University, overall the opposite movements for production and new orders versus employment leave an element of uncertainty regarding next month’s PMI.

“The National PMI fell by 1.5 points to 48.6,” said Sabbarese. “National new orders and production also decreased, but unlike the Southeast PMI’s decreases, they were not sufficiently offset by increases from the other PMI components.”

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 November Southeast PMI include:

• New orders decreased 2.7 points to 54, 0.1 points above its six-month average
• Production decreased 5.7 points to 52, 3.8 points below its six-month average
• Employment increased 3.1points to 56, 0.9 points above its six-month average
• Supplier delivery time increased 4.1 points to 57, 5.2 points above its six-month average
• Finished inventory increased 3.0 points to 54 points, 4.9 points above its six-month average
• Commodity prices decreased 3.4 points to 37, 4.0 points below 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.

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For more information on the Southeast PMI or to talk with Sabbarese, call 470-578-6094.