Purchasing Managers Index dips to 61.0 in June
Despite slowdown, numbers indicate positive momentum for Southeast Michigan economy
The Southeast Michigan Purchasing Managers Index (PMI) dropped to 61.0 in June, suggesting that Metro Detroit's economy continued to grow over the past month but at a slower rate than May. The May PMI was 67.2.
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. A score above 50 indicates economic expansion. The higher the score is above 50, the faster the growth rate.
Despite the slight dip, the index value still signals a growing economy, according to experts.
"For seventeen consecutive months, the index has scored above 50, and the three-month average remains a very respectable 65.3. This is a strong positive indicator for the Southeast Michigan economy," according to Timothy Butler, associate professor of global supply chain management in Wayne State's business school.
Specific index values that comprise the PMI also remain strong. The Production Index value is 63.7, which is down from the May value of 79.8. Similarly, the New Orders Index is down from May - from 61.1 to 55.6 - but still above the benchmark value of 50.
Purchasing managers indicated that employment at their firms is growing, but not as fast as in May. The Employment Index dropped almost 10 points, from 65.1 in May to 56.5 in June. The three-month average remains above 60 at 62.1.
Specific items that purchasing managers noted as increasing in price were petroleum products, including chemicals, oils, greases and lubricants. However, there were also indications that fuel prices may be beginning to soften as well.
Some survey respondents observed positive signs for the automotive sector as well. "The automotive market seems to be picking up steam," one stated. "This may be the help the economy needs to begin job generation."
The complete Southeast Michigan Purchasing Managers Index report for June is available for download at this link.
