Purchasing managers index shows economic growth in Southeast Michigan

Posted on October 3, 2012

The Southeast Michigan Purchasing Managers Index rose to 50.6 points in September from 45.7 in August, ending a three-month decline.

A figure above 50 indicates economic growth.

Increases in production, new orders and vendor deliveries were all up in September.

Production was still below 50, but at 47.1, it was up 5.2 points from a month earlier. New orders in September rose to 51.5 from 41.9, and vendor deliveries were up to 55.9 from 50.

One downside in a generally upbeat report was that employment declined from a level showing growth — 53.2 — to one showing stagnation — 50.

“Employment, which had been growing, has basically leveled off,” said Nitin Paranjpe, a member of the supply chain faculty at Wayne State University’s School of Business Administration.

There is good news, though, in the employment number.

“Since employment is a lagging indicator, the growth in new orders and production activity should lead to a resumption of growth in employment in the future,” Paranjpe said.

Purchasing managers said the prices of copper, zinc, aluminum, steel, crude oil, resins and petroleum-based products increased in September, while the prices of stainless steel, propylene-based resins and rare earth metals were down.

When asked about expectations for activity over the next six months, 47.1 percent of purchasing managers said the economy will remain about the same, with 23.5 percent expecting more stability and 29.4 percent expecting less.

The index is a joint project between the school of business and the Institute for Supply Management-Southeast Michigan Inc.

Tom Henderson, Crain’s Detroit