PMI: Economy Cools, But Hiring Red Hot
DETROIT— The Southeast Michigan Purchasing Managers Index came in at 60.3 in June, a marked drop from 66.3 in May. However, PMI index values above 50 generally suggest an expanding economy; thus, June's figure means the local economy continues to grow, though at a slower rate than in May.
The Production Index value was strong at 60.9 and the Employment Index again was very strong at 76.1.
"The Employment Index continues to indicate that employment conditions in Southeast Michigan are favorable," said Timothy Butler, associate professor of supply chain management at Wayne State's business school. "The three-month average is at a very strong level of 75.5, and at 76.1 this month, the index is close to a five-year high."
New orders dropped from 67.3 last month, but remained positive at 54.2. Finished goods inventory declined slightly to 47.8, beneath the threshold index value of 50.
The Commodity Prices Index dropped from 50.0 to 43.5, with purchasing managers noting that petroleum products and copper are down in price. Resins and plastics were reported to be up in price.
"Something is happening in the Southeast Michigan economy that is driving this dramatic drop in the Commodity Price Index, but at this time the cause remains unknown," said Ken Doherty, a member of the Institute for Supply Management and assistant vice president for procurement and strategic sourcing at Wayne State University.
More than 77 percent of respondents reported that they believe the economy will remain the same or become more stable over the next six months.
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. The complete report for June is available for download at www.ism-sem.org/uploaded_pics/pdf-20120629122649.pdf.
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.
Visit their Web site at http://www.ism-sem.org.
Wayne State University is a premier urban research university offering more than 400 academic programs through 13 schools and colleges to nearly 32,000 students. The School of Business Administration offers AACSB accredited programs at the bachelor, master and doctoral levels and is recognized for academic excellence by The Princeton Review and U.S. News and World Report. Learn more at www.business.wayne.edu.
