DETROIT (WWJ) — The Southeast Michigan Purchasing Management Index slipped to 59.9 in September from August’s reading of 60.2.
However, the three month average of 57.7 still provides strong evidence of an expanding economy, economists said.
The PMI is a diffusion index with 50 as the baseline. Respondents are asked whether a variety of economic indicators like sales and hiring are up, down or the same from a month earlier. The percentage answering higher moves the index that many percentage points above 50; the percentage answering lower moves the index that many percentage points below 50. Thus, the farther above 50 the index is, the faster the economy is growing, and the farther below 50, the faster it’s shrinking.
“September marks the third consecutive month of increased economic activity throughout Southeast Michigan,” said Nitin Paranjpe, a supply chain faculty member at Wayne State’s School of Business Administration who interpreted this month’s results. “Contributing to the drop in September’s PMI was a reduction in production by about four points to 64.6 from 68.5 in August, and employment which fell about five points to 54.2 for the month.”
The six-month outlook, according to respondents, is generally positive with 75 percent expecting the economy to remain the same or become more stable. However, continuing concerns among them include the impact of the Affordable Care Act, the federal debt ceiling issue and concerns about inflation.
Prices for nickel, steel, stainless steel, lumber, energy and air fares were up. Some resin grades, petroleum and natural gas were trending down or flat.
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 full report can be found at http://www.ism-sem.org/uploaded_pics/pdf-20131001123233.pdf.