Georgia manufacturers report offers some better news

By David Markiewicz

The Atlanta Journal-Constitution

Manufacturing activity in Georgia, which took a disturbing downward turn in recent months, bounced back in August.

The Purchasing Manager's Index, a measure of factory activity across the state, improved in all six areas considered, including new orders, production, employment, finished inventory and commodity prices, according to the latest monthly report from the Econometric Center at Kennesaw State University's Coles College of Business. The index is compiled from a monthly survey of a broad group of manufacturers and does not break out how individual goods have done.

The index increased 7.4 points in August to 58.1 after falling in July, June, May and April. It was at 67.6 in March. A reading of more than 50 indicates that manufacturing activity is expanding. Less than 50 indicates contraction. So Thursday's report was good news.

"Manufacturing seems to be headed in the right direction," said Don Sabbarese, professor of economics and director of the Econometric Center, "but it will take time to discern whether manufacturing will return to its higher second quarter trend or remain at its current slower pace."

He added that, "Gains in the last month may signal that the big declines in June and July may not have been a trend, but a soft spot for manufacturing."

The August index showed only a small increase in new orders but big increases in finished inventory and production. Given that, the report said, "the production increase was more closely tied to rebuilding inventories. However, since these respondents see a need to rebuild inventories it is reasonable to assume they anticipate new orders will improve in the future."