Southeast manufacturing index down, but sector still experiencing growth
Employment increased in May despite slowdown in production and new orders
KENNESAW, Ga. (June 4, 2013) — Manufacturing activity in the Southeast slipped during May, but manufacturers maintained their workforce with some additional hiring despite decreases in new orders, production and finished inventory, 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.
“All six Southeastern states recorded a PMI above 50 consistent with manufacturing growth,” said Don Sabbarese, director of the Econometric Center at Kennesaw State. “The 2.4-point employment increase suggests that manufacturers are not reducing their workforce. In other words, manufacturers are taking a wait-and-see approach to the current second quarter slowdown. This is the silver lining in an otherwise weaker May report.”
Alabama and Florida experienced the highest numbers on the Southeast’s Purchasing Managers Index, at 55.7 and 57.8, respectively. Mississippi and Tennessee recorded the lowest PMI, with 50.3 and 52.5, respectively. All of the Southeast states are still ahead of the national index, which fell to 49.
Highlights of the May Southeast PMI include:
· New orders decreased 4.4 points to 53.4, based on declines in Alabama, Florida and Louisiana
· Production decreased 6.1 points to 55.1, based on declines in Florida, Georgia and Alabama
· Employment increased 2.4 points to 60.2, based on increases in Alabama, Georgia and Florida
· Supplier delivery increased 0.8 points to 50.8, based on increases in Georgia, Louisiana and Tennessee
· Finished inventory decreased 4.3 points to 46.6, based on declines in Mississippi, Georgia and Tennessee
· Commodity prices decreased 2.5 points to 47.5, based on price declines in Alabama, Florida and Mississippi.
Prices increased in Georgia and Louisiana.
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 770-423-6094.