Manufacturing in Georgia started the year still moving forward but in a lower gear, according to a report today from the Kennesaw State University.
The sector, which employs more than 377,200 across the state, has run into some less-encouraging market conditions, according to the KSU Econometric Center, part of the Coles College of Business.
The center calculates a set of indices based on survey responses from manufacturing companies across Georgia. The answers are factored into the Purchasing Managers Index, which sums up how things look for manufacturing.
The overall index dipped from 52.5 to 52.0 in January, with a decline in five of the six categories measured in the monthly report, according to economist Don Sabbarese, director emeritus of the center.
A reading higher than 50 on the index indicates that manufacturing activity is expanding. Below 50 indicates that it is contracting.
— New orders were down.
— Production was down.
— Employment was down.
— Supplier delivery was down.
— Finished inventory was up.
— Commodity prices were down.
Among them, only inventories were above the six-month average.
Three of the measures showed contraction: employment, supplier delivery and commodity prices. Employment last year rose, but only 1.8 percent — slower than the state’s growth, according to the Bureau of Labor Statistics.
“Recent weakness has been a bit more pronounced,” wrote John Silvia, chief economist of Wells Fargo in a newsletter today.
This was the fourth consecutive month of decline nationally.
“Still the index remains above 43.1, the level consistent with a broad contraction in the economy,” Silvia wrote. “The index has previously posted at least a four-month streak of sub-50 readings without ushering in a recession.”
However, the index is signalling a warning, Silvia wrote. “With the headwinds on manufacturing not expected to abate over the near-term, it highlights the precarious state of the economy.”