Georgia manufacturing ticks up

The Atlanta Journal-Constitution

Manufacturing activity in Georgia showed improvement in January, but the upturn is far from a conclusive sign of better times to come.

The Georgia Purchasing Managers Index (PMI), a monthly snapshot that takes into account five variables including new orders, production, employment, supply deliveries and finished inventory, increased to 52.3 last month, up 4.9 points from December.

A PMI reading above 50 indicates that manufacturing activity is expanding. A reading below 50 indicates it is contracting.

After an up and down year in 2011, the fast start is "good news" according to Don Sabbarese, professor of economics and director of the Econometric Center at the Coles College of Business at Kennesaw State University. It produces the report, which is taken from a survey of manufacturers.

"Although the overall results were positive, it is not clear if this improvement is sustainable," the PMI report states.

In January, manufacturing employment, supplier delivery time and finished inventory all increased. But new orders and production decreased.

That "would suggest these (survey) respondents were not positioning themselves for growth," according to the report. The employment increase suggests otherwise, it added.

"The Georgia PMI moved above 50, to 52.3 to start off the year.," Sabbarese said. "That's a good start since any reading above 50 suggests the manufacturing sector is growing. However, some of the underlying components of the January PMI remain weak, so the question of sustainability remains."