Georgia Manufacturing Activity Appears To Be Slowing

We had a link in the Morning Reads yesterday about China’s Purchasing Manager’s Index falling as a result of a worldwide economic slowdown.  The domestic PMI is also slipping, with Georgia slipping more than the national average.  Walter Jones reports:

The Georgia Purchasing Managers Index retreated 6.9 points to a reading of 55 in June while the national PMI dropped just 3.8 points to 49.7.

A reading above 50 is considered an indicator of continuing economic expansion.

Econometric Center Director Don Sabbarese noted that while Georgia’s index still points to a growing economy, the recent pattern invites concern.

“Georgia’s two-month slide of 8.8 points to 55 is still operating above the national PMI, but that is not much solace given the two-month trend,” he said.

The state index started the year at 52 and rose to a peak of 64 in April before retreating to the current level.

The positive note is that Georgia has been above 50 for the first half of the year, indicating that we are still growing our manufacturing base.  The slower rate of growth and getting closer to a rate of 50 is of great concern.  We need to get this trend back in a positive direction quickly.  Expect even more political press releases saying simply “Jobs.”



  1. Note that the national index’s drop below 50 was mostly attributable to a severe dropoff in export orders. The sooner the eurozone recapitalizes it’s banks and/or injects some stimulus into its economies, the better off we’ll all be.

    • John Konop says:

      We have a demand problem. This is what happens when you drive down wages to increase productivity to places like China, Mexico………Henry Ford understood why Adam Smith was against slave labor conditions in places like above ie workers must make enough to buy the products they produce. All the world has been doing is hiding the problem with debt that cannot be paid back. The spread between rich and poor has been growing since both parties have adopted the policy of moving blue collar jobs to places that pay peanuts and have no real human rights for workers. Adam Smith warned this would create issues we are seeing……………..

  2. Bill Dawers says:

    It’s hard to know right now if this is just a blip or is really, really bad news. Pessimists will note not only Europe and China, but also the pending “fiscal cliff” with a broad range of taxes scheduled to rise in January and with some pretty deep cuts to defense scheduled to take effect. From Reuters this a.m., the IMF encouraging the U.S. not to wait to set a clearer fiscal policy:

  3. saltycracker says:

    Gross stats get gross speculation. When some benchmark varies greatly it would be wise to understand what it means. Is it a data timing blip ? Is the market comparably off ? Are we not diversified enough ? Are we loosing share ? Are competitors doing something different (smart or stupid) ? Is the business going elsewhere & why ?

    As for new business, the vogue lately has been to politically pick winners and loosers by leveraging taxpayers and established businesses to attract new “jobs”. If manufacturing business is good, cut taxes for every business in that category. Pass out no money below zero taxes paid. Usually the best thing govt can do is stay away and just keep folks from trampling on each other.

    • saltycracker says:

      P.S. Wall Street is currently betting it’ll all work out with the tax cliff, healthcare and world economy but a wise businessman better keep lean, mean and cash alert until we see daylight.

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