Southeast Manufacturing Heats Up After A Lethargic Spring

Southeast manufacturing heats up after a lethargic spring June sees 2.7-point increase based on pickups in new orders and production.

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KENNESAW, Ga. — Southeast manufacturing activity improved in June after three consecutive months 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.

June’s Southeast PMI of 55.1 was driven up by a sharp 9.3-point increase for new orders and a 8.9-point increase for production. This month’s increase moved the Southeast PMI closer to its six-month average of 56.5. While Southeast employment slipped 3 points to 57, it still remains at a level of sustainable growth.

According to Don Sabbarese, director emeritus of the Econometric Center and professor of economics at Kennesaw State University, June’s PMI numbers suggest manufacturing is beginning to recover from the 1st quarter economic drag on the overall economy.

“The National PMI also experienced improvement, although not as strong as June’s SE PMI, of a 0.7 point increase to 53.5,” Sabbarese said. “Early signs of improved retail sales may continue to contribute to improved manufacturing activity. The June National and Southeast readings offer some positive signs moving forward. ”

Six Southeastern states — Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee — are included in the Econometric Center’s monthly regional report. Four of the six experienced higher PMI readings.

Highlights of the June Southeast PMI include:

  • New orders increased 9.3 points to 55.3, based on increases for Alabama, Florida, and Georgia
  • Production increased 8.9 points to 57.9, based on increases for Alabama, Florida, and Georgia
  • Employment decreased 3.0 points to 57, based on decreases for Louisiana, Florida, and Georgia
  • Supplier delivery time decreased 3.4 points to 52.6, based on decreases for Alabama, Georgia and Tennessee
  • Finished inventory increased 1.6 point to 52.6 points based on increases for Florida and Georgia
  • Commodity prices decreased 1.4 points to 52.6, based on decreases for all Alabama, Florida, and Mississippi

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.

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