Georgia manufacturing dropped 8.3 points to land at 45.9 in August, according to the Purchasing Managers Index released today by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business.
 
The latest numbers indicate that manufacturing in Georgia is no longer expanding, and is in fact contracted in August. New orders and production remained weak for the second consecutive month, each falling below 50. New orders were driven down as the percent of respondents reporting higher new orders slipped from 50 percent in June, to 39 percent in July, to 22 percent in August.
 
Employment also fell as a response to two consecutive months of weak production. Since June, the percent of respondents reporting higher production levels fell from 50 to 19 percent. This drop off is consistent with a drop in respondents reporting expected higher production in the next three to six months from 42 percent in July to 37 percent in August.
 
“Manufacturing has been weaker and more volatile in the last four months,” said Don Sabbarese, director emeritus of the Econometric Center and professor of economics at Kennesaw State University.  “This is consistent with the mixture of positive and negative data on a broader economic level. This volatility creates uncertainty and has made it more difficult to identify a clear trend going forward.”  
 
While employment had remained relatively stable in June and July, the number of respondents reporting lower employment jumped from eight percent to 26 percent. Although employment tends to be less volatile from month to month, this raises some additional concern, according to Sabbarese.  
 
“Automobile manufacturing continues to be the strongest yet most volatile sector contributing to this uncertainty,” said Sabbarese.
 
The National PMI also fell 1.6 points to 51.1 in August. Weakness in new orders and production also accounted for the major source of its weakness.
 
Summary of highlights from the August PMI:

New orders down 11.3 points to 44.4, 13.2 points below its six-month average

Production down 20.9 points to 42.6, 19.3 points below its six-month average

Employment down 11.5 points to 48.1 points, 8.7 points below its six-month average

Supplier delivery up 3.8 points to 51.9, 3.2 point below its six-month average

Finished inventory down 1.6 points to 42.6 points, 6.2 points below its six-month average

Commodity prices down 20.5 points to 33.3, 13.9 points below its six-month average

The Georgia PMI provides a snapshot of manufacturing activity in the state, just as the monthly PMI released by the Institute for Supply Management provides a picture of national manufacturing activity. A PMI reading above 50 indicates that manufacturing activity is expanding; a reading below 50 indicates it is contracting.