The Southeast Michigan Purchasing Managers Index increased to 56.3 in December, showing a faster economic growth rate than the prior month. Index values above 50 represent an expanding economy.
The local PMI expanded for the 11th straight month in December, indicating that the economy in southeastern Michigan is growing stronger and sustaining growth.
According to the monthly survey of purchasing managers compiled by the Wayne State University School of Business Administration and the southeast Michigan chapter of the Institute for Supply Management, the improvement is driven by a number of factors.
“New orders and employment both expanded sharply in December, coming in at 60.3,” said Timothy Butler, associate professor of global supply chain management at Wayne State’s business school, who analyzed the survey results. “More than one-third of the purchasing managers who responded to the survey reported that their organizations increased hiring in December over November.”
Butler added: “Production continued to grow for the 11th straight month, though it slowed slightly in December. A decrease in finished goods inventories and increasing commodity prices also point to increasing demand and economic activity.”
When asked about the stability of the local business environment over the next six months, more than 38 percent of purchasing managers said that they expected more stability, a sharp contrast to November when only 14 percent expected a more stable environment. Less than 8 percent of survey respondents thought the economy would be less stable.
Corresponding global and regional indexes also showed improvement in December. The national manufacturing Purchasing Managers Index value was 57 and indicated growth in the national economy for the 20th consecutive month. The Eurozone manufacturing Purchasing Managers Index expanded to 57.1 and the Chicago PMI expanded to 61.8, which was the 15th consecutive month of expansion in those regions.