Manufacturing activity in Georgia increased in January, but the latest uptick is far from a conclusive sign of better times to come, a new report suggests.
The Georgia Purchasing Managers Index (PMI), a monthly snapshot that takes into account five variables including new orders, production, employment, supply deliveries and finished inventory, increased to 52.3 last month, up 4.9 points from December.
A PMI reading above 50 indicates that manufacturing activity is expanding. A reading below 50 indicates it is contracting.
After an up and down year in 2011, the fast start is good news, according to Don Sabbarese, professor of economics and director of the Econometric Center at the Coles College of Business at Kennesaw State University. It produces the report, which is taken from a survey of manufacturers.
But, he added, an "unexpected drop in production leaves some uncertainty regarding a sustainable growth trend."
In January, manufacturing employment, supplier delivery time and finished inventory increased. But new orders and production decreased.
The decrease in production and increase in finished inventory “would suggest these [survey] respondents were not positioning themselves for growth,” the report states, although the increase in employment "suggests otherwise," it added.
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