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Georgia’s April Manufacturing Activity

by: Smith and Howard

May 1, 2017

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Georgia’s Purchasing Managers Index (PMI) — a reading of economic activity in the state’s manufacturing sector — decreased minimally by 0.3 points in April to 72.1. National and southeast PMIs slid several points.

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 April respondents:

  • “Outlook is still very good even though a bit slower than last 60 days.”
  • “We continue to be optimistic and hopeful that the economy will continue to improve. Infrastructure spending will be very beneficial to the steel industry.”
  • “Our new orders for April are 80% over last year April. YTD our new orders are more than 40%.”

Other highlights of the April PMI include:

  • New orders were down 2.5 points, to 85.7
  • Production was up 9.2 points, to 85.7
  • Employment was down 2.7 points, to 67.9
  • Supplier delivery time was up 1.9 points, to 60.7
  • Finished inventory was down 6.9 points, to 60.7
  • Commodity prices were down 8.0 points, to 71.4

The Georgia PMI provides a snapshot of manufacturing activity in the state, just as the monthly PMI released by the Institute for Supply Management provides a picture of national manufacturing activity. The national PMI was down 2.4 points in April, to 54.8. A PMI reading above 50 indicates that manufacturing activity is expanding; a reading below 50 indicates it is contracting.

The Georgia PMI 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.

The PMI, compiled from a monthly survey of manufacturers, is the earliest indicator of market conditions in the sector. Since manufacturing, which accounts for 11 percent of GDP, is sensitive to changes in the economy, it can also reveal changing macroeconomic trends.

The PMI’s value is in its timeliness and sensitivity to variables such as interest rates, global markets and other economic changes. The Georgia PMI provides valuable data used by institutions such as the Federal Reserve Bank of Atlanta to assist in their analysis of current economic conditions, along with many other data sources, to get a picture of economic activity.

Read the entire report by clicking here. Contact any member of the manufacturing industry group or the distribution industry group of Smith & Howard at 404-874-6244 or simply fill out the form below.

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