DETROIT — Results from a new survey of purchasing managers show that the Southeast Michigan economy slowed sharply last month.

The Southeast Michigan Purchasing Managers Index, a composite index of local economic activity, plunged to 51.5 in November. Its decline from 59.7 in October indicates that although the southeast Michigan economy grew for the 22nd consecutive month, economic activity decreased significantly over the past month.

“This is the lowest PMI figure in 2011, and comes right when the retail economic sector traditionally accelerates,” said Nitin Paranjpe, an economist and supply chain faculty member at Wayne State University’s School of Business Administration.

Ken Doherty, assistant vice president for procurement and strategic sourcing at Wayne State University said that the slowdown seemed to occur “particularly in the manufacturing sector.”

The monthly PMI survey, a joint effort of Wayne State’s business school and the southeast Michigan chapter of the Institute for Supply Management, measures production, employment, new orders, raw materials and finished goods inventories, vendor deliveries and commodity prices to get a reading of the local economy. It also asks purchasing managers what they expect the business environment to look like six months into the future.

“Declines in production and inventories are the two areas that seem to have significantly impacted the overall PMI, which still remains above 50, but has significant variance between the individual measurements,” Doherty said.

Paranjpe said that although production activity declined, “new orders and employment levels seemed to show some strength.”

Growth in commodity prices also seems to have moderated, continuing what has been a steady decline since August. This suggests that the inflation possibility that concerned economists may not be a problem.

About half of purchasing managers surveyed expected business conditions to stay relatively the same over the next six months, while the remaining respondents were split between expecting a more stable or less stable economic situation.

Paranjpe said “the variation in attitudes amongst the purchasing managers surveyed may imply that this slowdown is temporary. We’ll continue to watch the trends, which overall have been positive this year.”

The complete PMI survey for November can be downloaded from the Institute for Supply Management – Southeast Michigan Web site at

The Institute for Supply Management – Southeast Michigan serves its members as an affiliate of the Institute for Supply Management by providing superior opportunities for education, networking, and career enhancement as a means of advancing and promoting the leading edge practices and profession of purchasing and supply management.


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