Georgia factories slowing

ATLANTA -- Georgia manufacturers have been tapping the brakes for the last two months, according to a report released Monday by the Econometric Center at Kennesaw State University.


The Georgia Purchasing Managers Index retreated 6.9 points to a reading of 55 in June while the national PMI dropped just 3.8 points to 49.7. A reading above 50 is considered an indicator of continuing economic expansion.

Don Sabbarese, director of the center, notes that while Georgia’s index still points to a growing economy, the recent pattern raises concern.

“Georgia’s two-month slide of 8.8 points to 55 is still operating above the national PMI, but that is not much solace given the two-month trend,” he said.

The state index started the year at 52 and rose to a peak of 64 in April before retreating to the current level.

The index comes from a survey of the managers who buy supplies for their plants and includes questions about six factors such as new orders, production and prices for raw materials.

The executives reported significant decreases in every category except for employment.

“Employment was the only component to increase. It is up 3.3 points to 57. That means this two-month trend has not yet adversely affected their hiring,” Sabbarese said.

The national survey, also released Monday by the Institute of Supply Management, showed decreases in five of the six components as well. While employment dropped 0.3 points in that index, supply-delivery times increased 0.2 points. Rising delivery times can suggest suppliers are busier, which would be a positive sign for the economy, but it can also be symptom of delays caused by reduced manpower.

“Sharp reductions for new orders and production suggest this slowdown is widespread,” Sabbarese said.