Regional manufacturing remained strong in April
Southeast manufacturing activity showed very healthy levels of production and incoming orders in April, according to the Southeast Purchasing Managers Index Report from Kennesaw State University's Econometric Center. The index increased 2.5 points in April to a level of 63.5 points, regaining most of the 3 point decline from March. The Southeast Purchasing Managers Index (PMI) has been above the expansion/contraction level of 50 each month this year. (A reading above 50 indicates an expansion in the manufacturing sector; see the Econometric Center's website for a full description of the methodology.)
The employment component of the index decelerated 4.4 points in April to 57.9 points. Although the reading fell back a bit in April, it remained above the level of 50, indicating that employment gains continue in regional manufacturing. Looking at actual employment data from the U.S. Bureau of Labor Statistics (BLS), we see that over the last two years, factory employment in the region has risen by a seasonally adjusted 38,500. (Regarding the next two charts, note that the BLS does not provide seasonally adjusted data for Alabama manufacturing employment, but it does release seasonally adjusted data for factory employment for the other five states in our District. The Atlanta Fed seasonally adjusted the Alabama data provided by the BLS for this exercise.)
For insight into current and expected economic conditions, we reach out to businesspeople throughout the region. Recently, our contacts in the auto production and energy sectors have shared positive reports for several months. We've received similar reports from our agriculture-related manufacturing contacts as well.
Overall, the manufacturing sector appears to be performing well in terms of total employment. In fact, employment gains in the region's manufacturing sector (as defined by the sum of total jobs in the manufacturing sectors of the six states in the Atlanta Fed's region) have not been as strong as they are today since mid-1995. In March, the year-over-year percent change in total manufacturing employment was 1.5 percent.
All told, recent data from the Southeast PMI and the BLS employment reports point to positive developments in the region's manufacturing sector.
By Mike Chriszt, a vice president in the Atlanta Fed's research department
TrackBack URL for this entry:
Listed below are links to blogs that reference Regional manufacturing remained strong in April: