Southeast Manufacturing Activity Drops for Second Consecutive Month
Press release from the issuing company
Tuesday, July 8th, 2014
Manufacturing activity in the Southeast continues at a healthy level despite its second month of decline, 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.
The Southeast PMI decreased 4.5 points to 55.3, while the National PMI dropped 0.1 of a point to 55.3. Southeast manufacturing activity fell due to a decline in new orders and production, dropping 12.9 and 11.5 points from their 2014 high marks of 72.3 and 68.1, respectively, said Don Sabbarese, director of the Econometric Center at Kennesaw State.
This is the second consecutive time the PMI has dropped in the last three months. Despite its slower pace, the Southeast PMI recorded higher readings than the National PMI for new orders, employment and supplier delivery time, while the National PMI registered higher readings in production and finished inventory.
“Southeast manufacturing remains on a steady but lower growth path,” said Sabbarese. “However, we are encouraged as it does appear to be sustainable.”
Six states comprise the Southeast PMI – Alabama, Florida, Georgia, Louisiana, Mississippi, and Tennessee. In June, Alabama and Florida both recorded lower PMI than the other four states.
Highlights of the June Southeast PMI include:
- New orders decreased 10.1 points to 59.4, based on decreases for Alabama, Florida, Georgia and Louisiana
- Production decreased 10.8 points to 56.6, based on decreases for Alabama, Florida and Georgia
- Employment decreased 4.6 points to 58.5, based on decreases for Alabama, Florida, Georgia, Louisiana and Mississippi
- Supplier delivery increased 1.8 points to 59.4, based on increases for Georgia, Louisiana and Mississippi
- Finished inventory increased 1.1 points to 42.5, based on increases for Georgia, Louisiana and Mississippi
- Commodity prices decreased 10 points to 58.5, based on decreases for Alabama, Florida and Georgia.
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.