Employment rebounded 8.3 points representing the strongest sign of sustainable growth, as it offset a 7.3 point drop in new factory orders, according to the Purchasing Managers Index released Jan. 2 by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business.
The PMI provides a snapshot of manufacturing activity in the state. A PMI reading above 50 indicates that manufacturing activity is expanding, while a reading below 50 indicates it is contracting.
The Georgia PMI for December increased by 1.6 points to 53.9 as the National PMI for December decreased 0.3 of a point to 57.0.
The weakness and volatility for the last four months is somewhat more sensitive to seasonal influence. December’s increase in employment and supplier delivery time and the PMI’s fourth quarter’s higher average of 53.3 versus third quarter’s 49.1 average suggests Georgia manufacturing is trending higher as we enter 2014, according to Don Sabbarese, director of the Econometric Center and professor of economics at KSU.
“Georgia’s PMI survey question regarding respondent expectations of production for the next three to six months also supports sustained higher growth as 39 percent expect higher production,” Sabbarese said.
Other highlights from the December PMI —
► New orders were down 7.3 points to 47.2, which was 2.4 points below its six-month average;
► Production was down 1.8 points to 52.8, which was 3.5 points above its six-month average;
► Employment was up 8.3 points to 58.3, which was 4.8 points above its six-month average;
► Supplier delivery was up 11.1 points to 61.1, which was 7.4 points above its six-month average;
► Finished inventory was down 2.3 points to 50, which was 0.3 of a point above its six-month average; and
► Commodity prices were up 7.3 points to 52.8, which was 3.1points below its six-month average.