Manufacturing activity at foreign-owned companies in Georgia declined for the second quarter of 2012, according to the Econometric Center at Kennesaw State University's Michael J. Coles College of Business.

The Georgia International Business Index (GIBI) — a reading of economic activity in the state's foreign-owned manufacturing sector — was down 8.9 points to 60.3, on the decrease in new orders, production and capital spending. The GIBI, unlike the Georgia Purchasing Managers Index (PMI), is collected quarterly and comprises new orders, production, employment and capital spending.

Highlights of the first quarter GIBI include:

• New orders fell 24 points to 52.9

• Production dropped 14.3 points to 58.8

• Employment was down 9.1 points to 70.6

• Capital spending shrunk to 6.6 points to 58.8

The GIBI provides a snapshot of the activity of foreign-owned manufacturers in the state on a quarterly basis. A GIBI reading above 50 indicates that manufacturing activity is expanding; a reading below 50 indicates it is contracting.

The Georgia GIBI reading is a composite of four components — new orders, production, employment and capital spending. Other collected information includes exports and imports as a percent of sales.

The GIBI, compiled from a quarterly surveys of foreign-owned manufacturers based in Georgia, is the earliest indicator of market conditions in this sub-sector of manufacturing. The GIBI offers a closer measure of foreign-owned manufacturing activity as a subset of overall manufacturing in Georgia. Its value lies in its timeliness and sensitivity to variables such as interest rates, global markets and other economic changes.