KENNESAW - Manufacturing activity in Georgia declined for the second consecutive month in September, the Econometric Center at Kennesaw State University's Coles College of Business reported.

Manufacturing activity in Georgia decreased by 0.8 points from August on the Georgia Purchasing Managers Index to 44.6 points for September, according to the center, which has compiled the state PMI since 1990.

The decline was led by a continued decline in new orders and production, said Dr. Don Sabbarese, economics professor and director of the Econometric Center at the Coles College of Business.

"It's just not that (manufacturing is) down for the second consecutive month, but that some of its underlying components, such as new orders and production, have slipped sharply over this same period of time," Sabbarese said.

"My best guess is that this should improve in the coming months based on the increase in employment and (survey respondents') expectation that production will increase in the next three to six months."

The monthly report is an economic indicator drawn from a survey of manufacturers in Georgia. The state PMI provides a snapshot of manufacturing activity in the state, where manufacturing accounts for 12 percent of the gross state product.

A PMI reading above 50 indicates that manufacturing activity is expanding; a reading below 50 indicates it is contracting. Georgia's PMI is comprised of five variables: new orders, production, employment, supply deliveries and finished inventory.

New orders declined by 13.5 points, to 36.5. That's 10.9 points below the six-month average for new orders. For actual production to pick up, new orders must rise, Sabbarese said.

The latest numbers indicate that Georgia's manufacturing sector continues to struggle as demand remains soft, the center reported. However, it said employment reported solid gains - reaching 50 points, an increase of 6.3 points - for the first time in 2009. About 15 percent of survey respondents did some hiring, up from zero percent in June.

Highlights of the September PMI include: 15.4 percent of survey respondents reported higher production for September, down 25 percent in August; 15.4 percent reported higher new orders, down from 37.5 percent in August; a new question regarding respondent expectations for production in the next three to six months resulted in 30 percent expecting higher production; finished inventory declined by 1.4 points to 42.3; and commodity prices rose by 3.2 points to 61.5, up 30.7 points from January.