Southeast Michigan Purchasing Managers Index shows sharp increase in new orders and a strengthening regional economy
The Southeast Michigan economy continues to strengthen at a modest pace according to the April Southeast Michigan Purchasing Managers Index (PMI). The April index value is 55.3— a slight decline from the March index of 55.7. Southeast Michigan PMI values have maintained a value above 50 for 37 of the past 38 months, indicating a steadily expanding economy. A PMI value above 50 generally suggests economic growth.
“Our research is showing three years of stability in the Southeast Michigan economy,” said Timothy Butler, associate professor of supply chain management at Wayne State’s business school. “This is a very encouraging sign.”
Butler said that a sharp increase in new orders, from 55.9 to 60.6, the Employment Index of 59.4 and the Vendor Deliveries Index of 54.5 contributed to the favorable reading this month.
However, he noted that the Finished Goods Inventory Index fell to 45.5 and the Commodity Prices Index dropped to 50. Commodity prices worldwide are declining, primarily as a result of a sharp slowdown in China, the major consumer of a large amount of commodities related to their industrial expansion.
Items increasing in price in Southeast Michigan included pharmaceuticals, aluminum, butadiene and crude oil based commodities. Propylene based resins, polypropylene, polyester fibers and copper were reported as down in price.
“According to our reports from purchasing managers in the region, most are expecting continuing stability in the local economy,” said Ken Doherty, a member of the Institute for Supply Management and assistant vice president for procurement and strategic sourcing at Wayne State University. “It remains to be seen how worldwide commodity prices and fiscal policy in Japan, Europe, and the USA may impact the Southeast Michigan region.”
The latest report shows that 72.7 percent of purchasing managers expect that the economy will remain about the same over the next six months, while 15.2 percent indicate the economy will be less stable and 12.1 percent say that the economy will be more stable.
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 complete report for April is available for download here.