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Purchasing Managers December Index Shows Growth In Production, Jobs

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DETROIT — The Southeast Michigan Purchasing Managers Index dipped one-tenth of a point in December to 51.8 from 51.9 in November.

PMI index values above 50 generally suggest an expanding economy.

“The Southeast Michigan PMI has maintained a value over 50 for 33 of the past 34 months, indicating a steady strengthening of the regional economy,” said Timothy Butler, associate professor of supply chain management at Wayne State’s business school.

Butler said the Production Index of 54.5 and the Employment Index of 53.2 contributed to the favorable reading this month, as did the Vendor Deliveries Index of 53. He added that the New Orders Index dropped to 48.5, which indicates that there was a reduction in new orders in the region in November.

The Commodity Prices index increased slightly to 54.5 from the November index of 51.4. Items increasing in price included armor plate steel, coiled steel and aluminum. Items reported down in price are liquid asphalt and polyethylene resin.

“The majority of purchasing managers responded that the economy will remain about the same or become more stable over the next six months,” said Ken Doherty, a member of the Institute for Supply Management and assistant vice president for procurement and strategic sourcing at Wayne State University. “The ‘fiscal cliff’ was on the minds of purchasing managers, who worry about the impact on the regional economy. Now that it has been averted, it will be interesting to see if or how that reflects in next month’s PMI.”

Of the purchasing managers surveyed, 60.6 percent indicated that the economy will remain about the same over the next six months, 12.1 percent indicated the economy will be more stable and 27.3 percent responded that the economy will be less stable.

The Southeast Michigan Purchasing Managers Index (PMI) is a research partnership between Wayne State University’s School of Business Administration and the Institute for Supply Management – Southeast Michigan.

The complete report for December is available for download at http://www.ism-sem.org/uploaded_pics/pdf-20130102174550.pdf.

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