Georgia International Business Index shows strong quarterly increase
International manufacturing in Georgia outpaces domestic manufacturing activity during third quarter
KENNESAW, Ga. (Oct. 22, 2013) — Georgia international manufacturing experienced an increase in activity during the third quarter according to the Georgia International Business Index (GIBI), a quarterly survey released today by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business.
The hike in the GIBI, which represents a 15-point jump over last quarter to 70.5, is largely due to increases in new orders and production — new orders rose 16.1 points, while production jumped by 18.8 points.
According to Don Sabbarese, director of the Econometric Center, the gains in the GIBI, which focuses on manufacturing activity for foreign-funded businesses in the state, are well above the three-month quarterly averages for the Georgia Purchasing Managers Index (PMI), which looks at state manufacturing activity.
Both indexes share three common variables — new orders, employment and production. Compared to the three-month, third-quarter averages of the PMI, the GIBI’s third-quarter new orders, production and employment were 35.1, 27.2 and 5.6 points higher, respectively.
“The strong increases in the three common variables suggest that GIBI participants experienced stronger third-quarter market conditions than their PMI counterparts,” said Sabbarese. “The GIBI’s mix of participants and concentration in certain industries may be partially responsible for these differences.”
Highlights from the third-quarter GIBI include:
· New orders up 16.1 points, to 78.6
· Production up 18.8 points, to 75
· Employment up 11.2 points, to 64.3
· Capital spending down 14.3 points, to 64.3
· Exports as a percent of total sales is up 0.7 of a point, to 12.4
· Imports as a percent of total sales is down 0.3 of a point, to 35.4
The GIBI reading is a composite of four variables — new orders, production, employment, and capital spending, is compiled by the Coles College’s Econometric Center. The GIBI, compiled from a quarterly survey of manufacturers, is the only indicator of market conditions for foreign-funded manufacturers. Manufacturing, which accounts for 9 percent of total employment, is sensitive to changes in the economy and trends in manufacturing, and reveals differences between domestic and foreign-funded manufacturers.
The GIBI’s value is in its timeliness and sensitivity to variables such as interest rates, global markets and other economic changes. The Georgia International Business Index provides valuable data used by businesses and government agencies to assist in its analysis of current economic conditions, along with many other data sources, to get a picture of economic activity.
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