DETROIT—The Southeast Michigan Purchasing Managers Index (PMI) dipped slightly in May 2016, losing 2.8 points to 59.9. However, with three consecutive strong months and significant increases in the commodity price and employment indices, the PMI’s three-month average rose all the way to 60.5. A PMI above 50 is considered an indication of an expanding economy.

The commodity price index shot up nearly 11 points to 60.9 in May, the highest it’s been this year. The employment index, which has risen for the past four months, jumped to 75.0, a sharp increase that may be explained by summer hires related to the end of the school year.  

“The Southeast Michigan Purchasing Managers Index has not fallen below 50 since June of 2014 —a period of two years — indicating a surprising resilience in the Michigan economy,” said Nitin Paranjpe, a finance faculty member in Wayne State University’s Mike Ilitch School of Business, who interpreted this month’s results.  

May’s survey respondents reported diesel, gasoline, lumber, information technology and labor up in price, while acrylic was down in price.

“While diesel and gasoline were expected to show increases as the summer season approaches, the fact that information technology and labor also moved up in price indicates a tightening of the labor market that is finally showing signs of life,” said Kenneth Doherty, assistant vice president of procurement and strategic sourcing at WSU and an Institute for Supply Management board member.

Almost 92 percent of survey respondents expect the economy to be more stable or stay the same over the next six months. Reported concerns included the potential impact of the next U.S. president, slowed spending for capital equipment, and price fluctuation in steel from China.

The Southeast Michigan Purchasing Managers Index (PMI) is a research partnership between Wayne State University’s Mike Ilitch School of Business and the Institute for Supply Management – Southeast Michigan.

The full report can be found at http://www.ism-sem.org/resources/files/Report-on-Business_May-2016.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.

The Wayne State University Mike Ilitch School of Business prepares students for challenging and rewarding careers, advances the boundaries of scholarly and practitioner knowledge, and enhances the economic vitality of the city of Detroit, the state of Michigan and beyond through its programs, research and community engagement. Established in 1946, the business school was renamed in 2015 in recognition of a $40 million gift from Mike and Marian Ilitch. Thanks to this lead investment, a new state-of-the-art building is slated to open in the heart of the District Detroit in 2018, and entrepreneurial programming and collaboration with city businesses are expanding. For more information, visit ilitchbusiness.wayne.edu.