Southeast Michigan Purchasing Managers Index takes a sharp drop in June to 47.1, following three months of steady economic growth
The Southeast Michigan Purchasing Managers Index (PMI) dropped to 47.1, in June after reaching 60.0 in May and three successive months of rising scores. However, the drop has affected the three month PMI average only slightly, moving from 56.2 to 53.6. A PMI value above 50 generally suggests economic growth.
"The major factor contributing to the PMI’s drop in June was the decline in the New Orders Index from 59.1 to 39.1," said Tim Butler, associate professor of supply chain management at Wayne State’s School of Business Administration, who interpreted this month’s results. "Other key components to be considered are both the Production Index which dropped from 59.1 to 45.7 and the Employment Index that fell from 70.5 in May to 57.1 in June," Butler said.
Encouragingly, 90.9 percent of June’s PMI respondents believe the economic outlook will remain stable or become more stable over the next six months, suggesting that the June drop does not signify a prolonged business decline.
Survey respondents’ comments included "Not much going on in either the military or domestic vehicle business," to "My facility just announced a six-week production furlough for all production workers."
June prices for diesel, gasoline and resins were commodities reported to be up in price, while nylon resins and feedstock were reported down.
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 full PMI report for June can be found at http://www.ism-sem.org/resources/files/Report-on-Business--June-2014.pdf.