KENNESAW - Manufacturing activity in Georgia increased in December because of solid gains in employment and finished inventory, according to a monthly survey.

A reading of economic activity in the state's manufacturing sector showed manufacturing increased to 45.9 in December, up 2.4 points from November.

The latest numbers indicate that Georgia's manufacturing sector is slowly improving, but at a slower pace than the national manufacturing sector, said Don Sabbarese, economics professor and director of the Econometric Center at Kennesaw State University's Coles College of Business, which compiles the state PMI.

"Georgia manufacturers are still not convinced that stronger economic growth across the country is leading to more sustainable growth for their markets," said Sabbarese. "Though the numbers show some improvement, manufacturers are still cautious."

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

Though manufacturing remains weak, the index rose by 10.5 points in 2009.

About 51 percent of Georgia PMI survey respondents expect to increase their production in the next three to six months, up from 47.8 percent in November, Sabbarese said. That is up from 32.1 percent in October.

Highlights of the December PMI include: Employment remains weak at 45.1, despite a rise of 3.8 points. New orders slipped slightly, by 0.3 of a point to 47.6. Production declined by 6.1 points to 43.9, as only 26.8 percent of respondents reported higher production while 39 percent reported lower production. Commodity prices increased by 2.8 points to 65.9, the highest reading for 2009.