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Study: State sees manufacturing growth, but…

KENNESAW, Ga. — Manufacturing activity in the Southeast improved slightly on the strength of higher new orders, production and employment, staying ahead of the national index, according to the Purchasing Managers Index (PMI) report released by the Econometric Center at Kennesaw State University’s Michael J. Coles College of Business.

“Alabama, Florida, Mississippi and Louisiana experienced growth during April,” said Don Sabbarese, director of the Econometric Center and professor of economics at Kennesaw State. “Georgia and Tennessee experienced decreases in all underlying components which contributed to their lower PMIs, but manufacturing continues to grow in both states.”

The National PMI for April is 50.7, a decline of .6 points from the previous month, while the April Southeast PMI is 55.5 points, an increase of .3 points over March. A PMI reading above 50 indicates that manufacturing activity is expanding; a reading below 50 indicates it is contracting.

“Even though Mississippi experienced growth in April, it is the only state with a PMI reading below 50, at 43.2,” Sabbarese said.

Highlights of the April Southeast PMI include:

  • · New orders increased 0.4 of a point to 57.8, based on increases in Alabama, Florida and Louisiana.
  • · Production increased 5.7 points to 61.2, based on increases in Alabama, Florida, Louisiana and Mississippi.
  • · Employment increased 4.1 points to 57.8, based on increases in Alabama, Florida and Louisiana.
  • · Supplier delivery time decreased 5.6 points to 50, based on decreases in Georgia, Louisiana Mississippi and Tennessee.
  • · Finished inventory decreased 2.8 points to 50.9, based on declines in Florida, Georgia and Tennessee.
  • · Commodity prices decreased 5.6 points to 50, based on price decreases in Georgia, Louisiana and Mississippi. Commodity prices increased in Florida and Tennessee.

The Southeast PMI provides a snapshot of manufacturing activity within the Southeastern United States. The reading is a composite of five variables — new orders, production, employment, supply delivery time and finished inventory. A sixth variable, commodity prices, is compiled by the Econometric Center but does not go into the PMI calculation.

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