Georgia manufacturing index drops

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ATLANTA -- An index of Georgia’s economic outlook based on factory activity ended 2011 on a down note, predicting contraction, while its national counterpart was rosy, according to reports released Tuesday.

The Georgia Purchasing Managers Index dropped 5 points in December, resulting in a net fall of 6 points for the year. In December, it registered 47.4. Readings of 50 points or less forecast a shrinking manufacturing economy.

The index began last year with a mildly bullish 53.8 points, and fluctuated for the next 12 months. For instance, November brought a 9-point rebound from the previous month, only to be followed by December’s 5-point decline.

“As we start the new year, there is no clear trend for 2012,” said Don Sabbarese, director of the Econometric Center that compiles the index at Kennesaw State University. “(The year) 2011 was a year of two separate trends: We saw growth in new orders and production during the first six months, but they were down significantly in the second half. Manufacturers are still trying to sort out what this means for 2012.”

The index contains information from 50 or so plant purchasing managers that the university surveys every month about how much business they are doing, how many employees they’re adding and the cost and availability of materials. A definitive trend usually indicates that managers are either ready to expand and hire more or that they’re pulling back.

When there’s no clear trend, plant executives tend to play it safe and delay expansion plans.

On the other hand, the national index also released Tuesday, by the Institute of Supply Management, was unambiguously positive. It logged its 29th consecutive month of increase, signaling economic growth nationally.

The industries reporting the most activity last month across the country included apparel, leather, printing, textiles, petroleum, machinery, food, computers, metals and paper. However, just as many industries reported pulling back, including plastics, non-metallic mineral, furniture, chemicals, wood products, fabricated metal, transportation equipment, electrical appliances and miscellaneous manufacturing.

“Manufacturing is finishing out the year on a positive note, with new orders, production and employment all growing in December at faster rates than in November, and with an optimistic view toward the beginning of 2012 as reflected by the panel in this month’s survey,” said Bradley J. Holcomb, chairman of the committee that compiles the national index.


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