DETROIT (WWJ) — The Southeast Michigan Purchasing Managers Index rose to 63.1 in October, from 59.9 in September, raising the three-month average for the economy to a robust 61.1.
“Over the last fourteen months, the PMI has come in at 50 or above 13 times,” said Timothy Butler, associate professor of supply chain management at Wayne State’s School of Business Administration, who interpreted this month’s results. “October’s numbers confirm that the Southeastern Michigan economy continues to strengthen.”
The PMI is a diffusion index with a midpoint of 50. A group of corporate purchasing managers is asked monthly if a variety of economic indicators, such as hiring, new orders and production, are the same, higher or lower than a month ago. Those answering higher push the index above 50, those answering lower push it below 50. Thus, PMI values above 50 suggest economic growth, and the higher above 50, the faster the growth, while values below 50 suggest recession.
Just over 75 percent of respondents report their expectations are for the economy to remain the same or become more stable, though several respondents reported upcoming programs may require closure for tooling and the short term government shutdown caused many CEOs to put things on temporary hold.
Prices for copper, plated steel, travel (air fare and related services), glue and corrugated materials were up in October. Down in price were resin and petroleum.
The Southeast Michigan Purchasing Managers Index is a research partnership between Wayne State University’s School of Business Administration and the Institute for Supply Management – Southeast Michigan.
To view this month’s report, visit http://www.ism-sem.org/resources/files/2013-September-PMI-Report.pdf.
The Institute for Supply Management – Southeast Michigan provides education, networking, and career enhancement as a means of advancing and promoting the leading edge practices and profession of purchasing and supply management. More at http://www.ism-sem.org.