Southeast manufacturing activity slipped even as new orders and production improved, according to the Southeast’s Purchasing Managers Index report released today by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business.
 
July’s drop to 54.3 was driven by weakness in supplier delivery time and finished inventory across the Southeast. The overall reading was bolstered by a 1-point increase in new orders and a 6.4-point increase in production. 32 percent of respondents reported higher new orders and 40 percent reported higher production in July. 50 percent of respondents expect their production to increase in the next three to six months.
 
According to Don Sabbarese, director emeritus of the Econometric Center and professor of economics at Kennesaw State University, July’s PMI numbers suggest that manufacturing continues to operate at a sustainable growth level, but has not improved to the higher levels some economists had hoped for.   
 
“The National PMI followed a comparable pattern with a 0.8 point drop for July’s PMI,” said Sabbarese. “Similar to the Southeast PMI, National new orders and production improved, but decreases for employment and finished inventory more than offset the pickup for new orders and production.”
 
Six Southeastern states — Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee — are included in the Econometric Center’s monthly regional report. Four of the six experienced higher PMI readings.
 
Highlights of the July Southeast PMI include:  

·      New orders increased 1.0 points to 56.3, based on increases for Alabama, Mississippi and Tennessee
·      Production increased 6.4 points to 64.3, based on increases for Florida, Louisiana, Mississippi and Tennessee
·      Employment decreased 0.8 points to 56.3, based on decreases for Florida, Mississippi and Tennessee
·      Supplier delivery time decreased 5.3 points to 47.3, based on decreases for Florida, Georgia, Louisiana and Mississippi
·      Finished inventory decreased 5.3 points to 47.3 points based on decreases for Alabama, Florida, Georgia, Mississippi and Tennessee
·      Commodity prices decreased 7.1 points to 45.5, based on decreases for all Alabama, Florida, Georgia, Louisiana and Tennessee