Georgia Manufacturing Activity Continues Growth in May

Dr. Don Sabbarese

Tuesday, June 3rd, 2014

Georgia manufacturing activity remained strong for May, even as new orders fell from its high April reading, according to the Purchasing Managers Index (PMI) released today by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business.  

The Georgia PMI for May decreased by 5.9 points to 56.8. While production remained strong for May, the components of employment, supplier delivery and finished inventory dropped as a reaction to the lower new orders, according to Don Sabbarese, director of the Econometric Center and professor of economics at Kennesaw State. 

According to the report, 47 percent of Georgia manufacturers who participate in the monthly survey reported higher new orders, down 12 percent from April. Similarly, 41 percent of participants reported higher production. Typically, such high levels, above 40 percent, are solid conditions for growth, Sabbarese added.  

“Backlog orders from weather disruptions have worked their way through the supply chain, so the current numbers reflect a sustainable healthy level of underlying growth,” Sabbarese said.

Other highlights from the May PMI:

  • New orders down 6.8 points to 68.2, 8.2 points above its six-month average
  • Production remained at 65.9, 8.1 points above its six-month average
  • Employment down 6.8 points to 56.8, 2.2 points below its six-month average
  • Supplier delivery down 6.8 points to 54.5, 4.0 points below its six-month average
  • Finished inventory down 9.1 points to 38.6, 11.5 points below its six-month average
  • Commodity prices up 4.5 points to 68.2, 10.8 points above its six-month average

The Georgia PMI provides a snapshot of manufacturing activity in the state, just as the monthly PMI released by the Institute for Supply Management provides a picture of national manufacturing activity. A PMI reading above 50 indicates that manufacturing activity is expanding; a reading below 50 indicates it is contracting. 

About Dr. Don Sabbarese

Dr. Donald Sabbarese specializes in the area of macroeconomics and financial institutions at Kennesaw State University. He directs the Georgia Purchasing Managers Survey and other research involving the local economy, such as industry surveys and economic impact studies. His work at the Econometric Center has been reported in the regional and national media. He is a frequent speaker to business and civic groups and has contributed to local magazines and other news media outlets. Dr. Sabbarese has testified before Georgia legislative committees on matters related to bank legislation.