February 6, 2015

Southeast Michigan Purchasing Managers Index drops sharply in January to 50.0

DETROIT-- The Southeast Michigan Purchasing Managers Index (PMI) for January is 50.0, down from 64.2 in December, representing a nearly 15 point drop.

"Since a PMI Index value above 50 indicates an expanding economy, January's finish of a PMI exactly at 50 indicates that the economy is level with the previous month, neither expanding or retracting," said Timothy Butler, associate professor of supply chain management at Wayne State's School of Business Administration, who interpreted this month's results. "It's important to realize that even though the PMI index declined, the economy maintained relative stability compared to the prior month, with the three month average at 57.0."

Index values contributing to January's PMI include New Orders, declining from 66.7 to 48.3, Production, down from 62.5 to 51.7, as well as Finished Goods, dropping from 58.3 to 44.8, and Employment falling from 70.0 to 51.7.

Butler also pointed out that respondents remain optimistic about the economy as 86 percent expect the economy to remain the same or improve over the next six months, while just 14 percent believe the economy will become less stable.

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 PMI report for January can be found at http://www.ism-sem.org/resources/files/Report-on-Business-January-2015.pdf

The Institute for Supply Management - Southeast Michigan serves its members as an affiliate of the Institute for Supply Management by providing superior opportunities for education, networking, and career enhancement as a means of advancing and promoting the leading edge practices and profession of purchasing and supply management. Visit their website at http://www.ism-sem.org.

Wayne State University is a premier urban research institution of higher education offering 370 academic programs through 13 schools and colleges to nearly 28,000 students. The School of Business Administration offers AACSB accredited programs at the bachelor, master and doctoral levels. Learn more at www.business.wayne.edu.