Purchasing Managers Index Dips To 53.1 in September
DETROIT -- The Southeast Michigan Purchasing Managers Index (PMI) dropped slightly from 53.8 in August to 53.1 in September.
Levels above 50 in this index indicate economic growth, so the lower number means the economy was growing a bit more slowly in September than it was in August.
The Southeast Michigan PMI, a composite index of local economic activity, is calculated from a monthly survey of purchasing managers administered by faculty from the School of Business Administration at Wayne State University and the local chapter of the Institute for Supply Management. The higher the score is above 50, the faster the growth rate.
Although the PMI indicated an expanding local economy for 20 consecutive months, it has fallen closer to 50 in each of the past six months. This trend suggests that Southeast Michigan's economy is beginning to experience a slowdown, according to economists.
Nitin Paranjpe, an economist and global supply chain management faculty member in Wayne State's business school, said that the Southeast Michigan economy experienced growth this month in spite of the increasing uncertainty and volatility in the U.S. economy as well as the international economy, primarily Europe.
"We are now starting to see the greater uncertainty reflected in our survey responses," he said. "This month more than one-third of responding purchasing managers said they expect a less stable economy. This shows a marked deterioration in conditions going forward, considering that figure was less than 7 percent in July."
Specific index values that comprise the PMI also declined. While production activity is still expanding at an index value of 53.2, there are signs of a slowdown here as well, with new orders falling below 50. Employment activity perked up to 59.7, but Paranjpe pointed out that employment is a lagging indicator.
"The slowdown in production and new orders may eventually affect employment growth rates," he said.
The complete Southeast Michigan Purchasing Managers Index report for September is available online at http://www.ism-sem.org/uploaded_pics/pdf-20110929075546.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.
The School of Business Administration at Wayne State University provides quality business education through degree programs accredited by AACSB International. 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.
