Manufacturing activity across the Southeast improved in October due to increases in new orders and production, 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.
Production saw the largest spike of all PMI components, increasing 8.3 points to 67.3. New orders continued their steady growth, increasing 3.4 points to 64.4. 46 percent of respondents saw an increase in new orders for the month of October, prompting 44 percent of respondents to increase production.
Six Southeastern states — Alabama, Florida, Georgia, Louisiana, Mississippi, and Tennessee — are included in the Econometric Center’s monthly regional report. Four states — Alabama, Florida, Georgia and Louisiana — recorded lower PMIs.
“Southeast manufacturing’s high new orders and production readings, should it continue, will lead to a higher PMI in the future,” said Don Sabbarese, co-director of the Econometric Center and professor of economics at the Michael J. Coles College of Business. “Finished inventory’s reading of 41.3 points should increase in the future as a result of higher new orders and production.”
Highlights of the October Southeast PMI include:
· New orders increased 3.4 points to 64.4, based on increases for Alabama, Florida, Georgia, and Louisiana
· Production increased 8.3 points to 67.3, based on increases for Alabama, Florida, Louisiana, Mississippi, and Tennessee
· Employment decreased 2.2 points to 54.8, based on decreases for Alabama, Georgia, Louisiana, and Tennessee
· Supplier delivery time increased 3.8 points to 54.8, based on increases for Alabama, Florida, Louisiana, Mississippi, and Tennessee
· Finished inventory decreased 5.7 points to 41.3 based on decreases for Georgia, Mississippi, and Tennessee
· Commodity prices decreased 2.0 points to 51, based on decreases for Alabama, Florida, Georgia , Louisiana, and Tennessee.
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.