Factory activity in Georgia declined for the second straight month in May, though the state's manufacturing sector remains relatively strong, a Kennesaw State University report shows.
Production, new orders and hiring all fell last month, driving down the Georgia Purchasing Managers Index, a monthly snapshot of manufacturing performance compiled from a survey of manufacturers.
The PMI for May was 64.6, off from 67.4 in April. In March, it was 67.6. A PMI above 50 indicates that manufacturing activity is expanding. A reading below 50 indicates it is contracting. The Georgia PMI considers new orders, production, employment, supply deliveries and finished inventory.
"It did slip, but from a relative standpoint it's still strong," said Don Sabbarese, director of the Econometric Center at Kennesaw State's Coles College of Business.
One reason for the decline is manufacturing supply chain problems in Japan caused by the earthquake in March. Some factories can't get all the parts they need to produce their products.
Sabbarese said it is unclear at this point whether the recent decline in the PMI suggests a turn for the worse.
"Let's see what happens in the next few months," he said.
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