Georgia manufacturing activity shows slight improvement for June

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Drop in new orders and production drives other components in monthly survey

KENNESAW, Ga.  (July 1, 2014) — Georgia manufacturing activity remained relatively stable for June, according to the Purchasing Managers Index (PMI) released today by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business.  The Georgia PMI for June increased by 0.5 of a point to 57.3.

According to the report, the five PMI components split for June with three components – new orders, production and employment – decreasing and two components increasing.  Georgia’s June new orders and production fell, but remain at relatively high levels, according to Don Sabbarese, director of the Econometric Center and professor of economics at Kennesaw State.  

“The recent slip in new orders and production ultimately drives the other components,” Sabbarese said. “Despite the drop, the new orders and production readings are still at sustainable growth levels, with 42.3 percent of respondents still reporting increases.”

“Future production expectations for the next three to six months were down compared to previous months. When asked in a separate survey question, only 27 percent of respondents expect higher production for June compared to 45 percent for May,” Sabbarase said. “This may be a harbinger for the future trend, but it’s still too early to tell.”

Other highlights from the June PMI:

  • New orders down 2.8 points to 65.4, 2.3 points above its six-month average
  • Production down 2.4 points to 63.5, 3.8 points above its six-month average
  • Employment down 3.0 points to 53.8, 4.4 points below its six-month average
  • Supplier delivery up 5.1 points to 59.6, 1.3 points above its six-month average
  • Finished inventory up 5.6 points to 44.2, 4.9 points below its six-month average
  • Commodity prices down 16.3 points to 51.9, 5.3 points below 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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