State’s manufacturing activity plummets
ACROSS MISSISSIPPI — Manufacturing activity in the southeastern United States declined by 1.6 points in July, according to the Econometric Center at Kennesaw State University’s Coles College of Business in Kennesaw, Ga.
The Southeast Purchasing Managers Index (SPMI) — a reading of manufacturing activity in the six-state Southeast — for July was 56.3, capping three months of decline. The Southeast PMI encompasses Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee, corresponding with the territory served by the Sixth Federal Reserve District.
“We now have two consecutive months of readings below 60,” said economist Don Sabbarese, director of the Econometric Center. “Though the numbers remain strong, the decline in July is consistent with the slowdown in the economy.”
Highlights of the July SPMI include:
• Manufacturing activity grew in four states, with Mississippi and Louisiana experiencing decreases
• Florida’s PMI of 47.8 remains weak, and was matched by Louisiana’s 47.5 reading
• Louisiana’s and Mississippi’s sharp PMI decreases of 9.3 and 9 points, respectively, are likely related to the Gulf oil crisis
• New orders experienced a big decline, 6.7 points, to 59.7
• Production increased 2.6 points, to 61.8
• Employment was down by 2.1 points, to 60.4
• More manufacturers are feeling optimistic about a recovery: 37 percent said they expect production to increase in the next three to six months, compared to 34 percent in June
• Supplier delivery time decreased by 6.4 points, to 53.5. This suggests a drop in demand for railroad and trucking services
The SPMI 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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