Georgia manufacturing activity has seen ups and downs  for the last two months of 2014, and will end on a downward turn. New orders unexpectedly fell in December, leading to a similar drop for production, according to the Purchasing Managers Index (PMI) released today by Kennesaw State University’s Econometric Center in the Michael J. Coles College of Business. 

The Georgia PMI for December decreased 7.1 points to 49.4 points, dropping it 5.1 points below its six-month average of 54.5. 

New orders and production hit their lowest levels since July. Employment also slipped, but remains at 56 percent, slightly below its six-month average. Since Georgia’s PMI is not seasonally adjusted, this unexpected reversal may be partially attributed to a seasonal influence rather than a trend shift, according to Don Sabbarese, director emeritus of the Econometric Center and professor of economics at Kennesaw State University. 

“Georgia’s manufacturing should remain strong based on 59  percent of respondents reporting future production is expected to increase for the next three to six months,” Sabbarese said. “This is up from November’s reading of 50 percent.”

Other highlights from the December PMI:

• New orders down 23.8 points to 41.2, 16.3 points below its six-month average

• Production down 17.5 points to 50, 10 points below its six-month average

• Employment down 4.1points to 55.9, 1.5 points below its six-month average

• Supplier delivery up 0.4 of a point to 52.9, 0.6 of a point below its six-month average

• Finished inventory up 9.6 points to 47.1 points, 3.0 points above its six-month average

• Commodity prices down 8.8 points to 41.2, 10.8 points below its six-month average

The Georgia PMI provides a snapshot of manufacturing activity in the state, just as the monthly PMI released by the Institute for Supply Management provides a picture of national manufacturing activity. A PMI reading above 50 indicates that manufacturing activity is expanding; a reading below 50 indicates it is contracting.