Georgia manufacturing slips, but prospects positive

Georgia manufacturers ended 2011 on a downswing, with new orders and production lower in December than in November.

But after a year in which the sector initially thrived, the prospects for growth this year are better, according to Kennesaw State University economist Don Sabbarese, who produces the Purchasing Managers Index Report. The monthly snapshot of manufacturing activity across the state is taken from a survey of manufacturers.

Sabbarese, professor of economics and director of the Econometric Center at the Coles College of Business, said he looks for manufacturing activity to improve.

“I base that on the strength of some sectors like auto, commercial airline production, capital goods spending by businesses and what we see on the national level,” Sabbarese said.

Manufacturing should be able to continue to create jobs, he added, yet there are “many wild cards,” including federal regulations and elections.

Georgia manufacturers saw growth in new orders and production over the first six months last year, but they fell in the second half.

In December, the Georgia Purchasing Managers Index fell five points to 47.4 after it jumped up 9.2 points in November. A reading higher than 50 on the index indicates manufacturing activity is expanding. Anything below that shows it is contracting.

The Georgia index stood at 53.8 last January, so it fell 6.4 points over the course of the year. The national index ended the year at 53.9 after a slight increase in December.

“On the national level, the PMI has turned to a positive trend,” Sabbarese said, “which we thought would be the case for Georgia.”