Georgia Manufacturing Activity Reverses its Two-Month Decline

Press release from the issuing company

Wednesday, March 5th, 2014

Georgia manufacturing activity reversed an anemic performance with a strong boost in new orders and production for February, which offset the doubledigit losses in the prior two months, according to the Purchasing Managers Index released Monday by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business.

The Georgia PMI for February of 56.7 is the highest reading since March 2013 when it reached 61.8. The National PMI for February also rose 1.9 points to 53.2.

According to the report, Georgia’s new orders and production rebounded by 13.1 and 13.7 points, respectively. Forty-two percent of respondents reported higher new orders, while 29 percent reported higher production.

Don Sabbarese, director of the Econometric Center and professor of economics at Kennesaw State, explained that weather could be responsible for the three-month swing, but other economic factors could be in play.

“As is typical in this case, a one-month adjustment of this magnitude is insufficient evidence of a trend change,” Sabbarese said. “Last month, 57 percent of Georgia’s PMI respondents expected their production for the next three to six months to increase. While that number slipped to 50 percent for February, it may still be a good indication that respondents remain fairly optimistic about the near future.”

Other highlights from the February PMI:

  • New orders up 13.1 points to 58.3, 7.8 points above its six-month average
  • Production up 13.7 points to 54.2, 4.2 points above its six-month average
  • Employment up 1.5 points to 56.3, 0.1 of a point above its six-month average
  • Supplier delivery up 12.2 points to 64.6, 9.2 points above its six-month average
  • Finished inventory down 7.1 points to 50, 0.9 of a point below its six-month average
  • Commodity prices down 0.3 of a point to 52.1, 2.4 points below 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.