Southeast Michigan Purchasing Managers Index drops sharply in December to 50.6, signaling year end slow down

The Southeast Michigan Purchasing Managers Index (PMI) for December is 50.6, down from 58.3 in November indicating a slow-down in economic expansion. This brings the three-month average down to 57.3.  A PMI value above 50 generally suggests economic growth.

"The PMI dropped in December primarily due to a decrease in new orders and production at year’s end," said Timothy Butler, associate professor of supply chain management at Wayne State’s School of Business Administration, who interpreted this month’s results. "It is important to realize that even though the PMI index declined, it still remains near 50, indicating that the economy maintained relative stability compared to the prior month. The Finished Goods Inventory rose sharply in December to 63.0, from 52.1 in November, and that the Employment Index increased slightly to 56.8, from 54.3 in November," Butler said.

Butler also pointed out that an encouraging 68 percent of respondents expect the economy to remain the same or improve over the next six months, while just under 22 percent believe the economy will become less stable. Respondents noted that they are waiting to see if new product launches are successful and new orders pick-up.

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.      

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