An Economic Update on Georgia’s Manufacturing Activity
Jul 11,2019
With the second quarter of 2019 behind us, the national and southeastern Purchasing Manager Index (PMI) reports a modest slip according to Kennesaw State University’s Coles College of Business’ Economic Center’s June 2019 PMI Report. The report goes on the indicate Georgia’s PMI – a reading of economic activity in the state’s manufacturing sector – shows a steady increase throughout 2019. In the June 2019 report, Georgia’s PMI advances on new orders, contrary to the nation and even the southeast. There are many conditions that affect Georgia manufacturers – both positive and negative – but the overall outlook for the industry remains stable. Highlights for the average of the first six months of 2019 compared to the average of the first six months of 2018: News orders were down 13.73 points Production was down 14.39 points Employment was down 8.93 points Supply Delivery Time was down 6.12 Finished Inventory was...
10 Tax Incentives for Manufacturers
Jul 03,2019
Costs of running a modern manufacturing company increase constantly. To offset some of those costs by minimizing taxes, Georgia manufacturers must constantly monitor available tax incentives and track qualifying expenditures and hires. While the 2017 federal tax reform legislation eliminated tax breaks like the Sec. 199 deduction, many mainstream federal and Georgia tax incentives remain available. Here are ten important incentives (four federal, six state) for manufacturing company finance professionals to consider . Federal Tax Incentives 1) Research tax credit Qualifying research and development expenses must meet a four-part federal test: ▪ From the outset, the research must be intended to resolve technological uncertainty (which could be as simple as cutting assembly time or as complex as integrating robots). ▪ Research must be technological in nature (i.e. rely on hard science, like engineering or physics). ▪ Its purpose must relate to a new or improved product or process. ▪ Substantially...
Manufacturers Aren’t Immune From Wayfair’s Sales Tax Impact
Dec 26,2018
Background on South Dakota vs. Wayfair Earlier this summer, the U.S. Supreme Court ruled in the landmark case South Dakota vs. Wayfair that the “physical presence test” for determining if a seller is required to administer sales taxes is “incorrect.” States may now legally require sellers to administer sales taxes, even if the seller has no in-state physical presence. The case is a momentous development in the debate over the digital economy’s responsibility for the collection of sales tax. As companies increasingly conduct business across state lines, how states and the federal government craft tax legislation that addresses the evolving definition of “nexus” significantly impacts all taxpayers—including manufacturers. While many states offer manufacturers generous sales tax exemptions on certain equipment and machinery purchases, the industry is now faced with new sales/use tax rules that impact both purchase and sale transactions. The Wayfair decision has important business implications manufacturers can’t afford...
Data-Driven Logistics: The Growing Use of Predictive Analytics
Jul 09,2018
Logistics companies depend on accuracy, timeliness and the efficient transportation of parts to meet distribution and customer requirements. The challenge is in the constant balancing act between managing inventory levels and meeting customer demand. What if there was a way to make predictions about future events – to know more precisely what the demand is at any given moment? Predictive analytics is changing the game for distributors and logistics operators that are using historical and real-time patterns to make such predictions and, as a result, decrease costs, create greater reliability and improve customer satisfaction.  Connecting the Dots Tapping big data, predictive analytics uses algorithms to track historical data to anticipate demand, avoid risks and adjust schedules—all of which better enable logistics managers to create proactive solutions. Through predictive analytics, logistics managers can anticipate future behavior by finding patterns, spotting trends and zeroing in on customer preferences. For example, the logistics...
Managing Cybersecurity Risks in Smart Manufacturing
Jul 09,2018
The manufacturing industry has increasingly embraced data interconnectivity as a way of achieving greater efficiencies and meeting customers’ needs. Manufacturers of all sizes are integrating the Internet of Things (IoT) – the connection of devices to the internet and each other – and other “smart” manufacturing technology into their daily operations. Yet as they do, they are also exposing their operations to greater security vulnerabilities. A Heightened Risk A Kaspersky Labs report published in October 2017 revealed that in the first half of 2017, manufacturing companies were the most susceptible to cyber threats—their computers accounted for about one-third of all attacks. Hackers are stealing trade secrets, intellectual property and even business plans. According to the BDO “2017 Manufacturing RiskFactor Report”, 96% of respondents worry about cybersecurity breaches, up 50% from four years ago. The IoT enables manufacturers to make things faster while data analytics helps them to spot potential problems...
Georgia’s February Manufacturing Activity
Mar 01,2018
Georgia’s Purchasing Managers Index (PMI) — a reading of economic activity in the state’s manufacturing sector — increased by 8.5 points in February to 67.7. The increase is driven by a surge in new orders and production. National and Southeast PMIs also rise.The Purchasing Managers Index (PMI) Report is underwritten by the Manufacturing and Distribution Group of Smith & Howard, a top Atlanta CPA firm with a focus on serving manufacturing businesses, and is produced monthly by the Econometric Center at Kennesaw State University.Some general remarks from the February respondents:"All is good moving into the busier time of the season for us.""Economic conditions are the best I can remember with nearly all end markets strong.""Skilled labor shortage still a concern."Other highlights of the February PMI include:New orders were up 18.3 points, to 80.8.Production was up 23.1 points, to 73.1.Employment was down 1.9 points, to 73.1.Supplier delivery time was down 1...
Industry 4.0: How Do You Pay For It?
Feb 28,2018
Embracing Industry 4.0 means investing time, energy and capital to implement advanced technologies and practices. Cost can be one of the biggest roadblocks to progress, particularly in the middle market. Pilot programs—even if you anticipate significant ROI in the long-term—may require reallocating budget or raising additional capital. For some manufacturers, it’s a make-or-buy decision between building new capabilities or buying through strategic acquisitions. Tax reform has added another layer of complexity to these financing and budgeting considerations, as manufacturers scramble to parse through the 1,000+ pages of provisions and explanatory statements in the new bill. Its impact goes far beyond the finance and accounting departments. Companies on the verge of major strategic business decisions, including those concerning Industry 4.0, all need to seriously consider the implications of tax reform. While many of the changes introduced will benefit middle market manufacturers—particularly the corporate tax rate cut—others create new challenges for funding innovation. For...
Georgia’s December Manufacturing Activity
Jan 03,2018
Georgia’s Purchasing Managers Index (PMI) — a reading of economic activity in the state’s manufacturing sector — decreased by 2.5 points in December to 60. Georgia, Southeastern and National PMIs remain in range consistent with continued expansion in goods-producing industries. However, regional index components are volatile due to seasonal factors and lower response rate. The Purchasing Managers Index (PMI) Report is underwritten by the Manufacturing and Distribution Group of Smith & Howard, a top Atlanta CPA firm with a focus on serving manufacturing businesses, and is produced monthly by the Econometric Center at Kennesaw State University. Some general remarks from the December respondents: "Seasonal slowdown so no surprise it will be slower for the next 2 months." "We have a good degree of positivity for 2018 for growth but a great deal of concern over rising prices, driver shortages, and tight inventories of Ti02." "This is our typical slowdown." Other...
2017 Manufacturing Employment Update
Dec 04,2017
U.S. manufacturing is on a comeback. Economic growth, increased consumer confidence, a rise in energy and commodity prices are a few components contributing to the growth of this industry. Manufacturing Employment Over the past 12 months, employment numbers point to overall progress. Since November 2016, U.S. manufacturers have added 156,000 workers, according to government data - a clear reversal from the 16,000 jobs lost between 2015 and 2016. However, the recent growth hasn’t surpassed the manufacturing payrolls increase seen in 2011 and 2014, when the industry gained more than 200,000 jobs. In September, manufacturing activity surged to a 13-year high. Due to Hurricanes Harvey and Irma, factories took longer to deliver goods which boosted the prices of raw materials. The Institute of Supply Management (ISM) reported factory employment reached its highest level since 2011. Economists point to the recent hurricanes playing a role in the high employment number; however, the...
Georgia’s November Manufacturing Activity
Dec 01,2017
Georgia’s Purchasing Managers Index (PMI) — a reading of economic activity in the state’s manufacturing sector — increased by 6.1 points in November to 62.5. Manufacturing is sustaining recent strength, while National, Regional, and State numbers cluster at levels suggesting the expansion remains in place.The Purchasing Managers Index (PMI) Report is underwritten by the Manufacturing and Distribution Group of Smith & Howard, a top Atlanta CPA firm with a focus on serving manufacturing businesses, and is produced monthly by the Econometric Center at Kennesaw State University.Some general remarks from the November respondents:"Conditions are very good for our industry.”"Our back log on new orders continues to increase.”“Still delays due to Hurricanes earlier this year.”Other highlights of the November PMI include:New orders were up 11.6 points, to 68.8.Production was up 18.8 points, to 68.8.Employment was down 13.4 points, to 68.8.Supplier delivery time was up 12.9 points, to 59.4.Finished inventory was up 0.4...

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