Georgia manufacturing’s PMI recovered 5.9 points following a 3 point increase for September. The PMI’s increase of 8.9 points for the last two months more than offset the sharp 8.3-point drop in August, according to the Purchasing Managers Index released today by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business.
 
While October’s PMI registered above 50 for the first time since July, it is not clear whether this sharp increase for the last two months will continue. Expected higher production in the next three to six months increased to 36 percent up from 21 percent in September. However, other related national and regional manufacturing data suggest manufacturing may remain at a low level of growth for the rest of the year.
 
Georgia employment slipped 0.6 of a point in October to 52, with 14.3 percent less respondents reporting increased hiring offset by 13 percent less respondents reporting lower hiring. Finished inventory and supplier delivery time’s readings of 56 and 52 also contributed to the sharp jump for the October PMI. National inventory remains volatile, which may be reflected in Georgia’s inventory reading, according to Don Sabbarese, director emeritus of the Econometric Center and professor of economics at Kennesaw State University.  
 
“Georgia manufacturing’s PMI has been fairly volatile with two sub 50 readings in August and September, and October’s reading of 54.8,” said Sabbarese. “The national October PMI slipped 0.1 of a point to 50.1 and has continued to slip over the past four months to register 4.7 points below Georgia’s October reading.”
 
The National PMI report only had 7 of its 18 industries reporting growth in October.
 
Summary of highlights from the October PMI:

New orders up 3.4 points to 56, 1.1 points above its six-month average
Production up 5.4 points to 58, 1.0 points above its six-month average
Employment down 0.6 points to 52.0 points, 3.1 points below its six-month average
Supplier delivery up 11.3 points to 56, 2.1 points above its six-month average
Finished inventory up 9.9 points to 52 points, 6.3 points above its six-month average

Commodity prices down 1.5 points to 38, 7.1 points below its six-month average
 
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. A PMI reading above 50 indicates that manufacturing activity is expanding; a reading below 50 indicates it is contracting.