Southeast Michigan Purchasing Managers index Shows Economy Picking Up

DETROIT (WWJ) -- The Southeast Michigan Purchasing Managers Index for January is 52.3, up from 50.6 in December, as both the production and new orders indexes rebounded after a seasonal, year-end low.

The Southeast Michigan PMI is a diffusion index with a midpoint of 50. A group of corporate purchasing managers is asked monthly if a variety of economic indicators, such as hiring, new orders and production, are the same, higher or lower than a month ago. Those answering higher push the index above 50, those answering lower push it below 50. Thus, PMI values above 50 suggest economic growth, and the higher above 50, the faster the growth, while values below 50 suggest recession.

"As the new year gets under way, our economy is picking up momentum, indicating growth in Michigan's southeastern economy," said Nitin Paranjpe, a supply chain faculty member at Wayne State's School of Business Administration, who interpreted this month's results. "Additionally, the commodity price index rose from December's 52.3 to 56.7 in January."

January prices for plastic, polystyrene, wire rod, aluminum, brass items, and contingent labor in information technology are all up. An encouraging 84 percent of respondents expect the economy to remain the same or improve over the next six months, while fewer than 17 percent believe the economy will become less stable.

Issues concerning PMI survey respondents' include health care reform, automotive sales and Corporate Average Fuel Economy regulations.

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 report can be found at http://www.ism-sem.org/resources/files/PMI-%20January%202014.pdf.

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