DETROIT—The Southeast Michigan Purchasing Managers Index (PMI) continued its gradual descent, losing 3.3 points to hit 55.5 in July 2016. Although this is the third straight month of decline, the three-month average is still very strong at 58.1. A PMI greater than 50 generally signifies an expanding economy. The PMI has not fallen below 50 since June 2014, indicating a resilient regional economy.
“Contributing to July’s strong PMI was the rise of the employment index to 64.3, up from 57.7 in June,” said Nitin Paranjpe, a finance faculty member in Wayne State University’s Mike Ilitch School of Business, who interpreted this month’s results.
New orders, though falling, came in at a very strong 60.7, and deliveries were up slightly to 51.4. The commodity price index gained more than 10 points to its highest reading this year — 64.3 — indicating greater pricing pressures and stronger demand. Both steel and fuel were reported to be up in price.
Significantly, 100 percent of the region’s purchasing managers responding to this month’s survey said they expect the economy to remain stable or improve over the next six months.
“None of the survey respondents report that their expectations of the business environment will become less stable six months down the line. This bodes well for the future of the Southeast Michigan economy,” said Kenneth Doherty, assistant vice president of procurement and strategic sourcing at WSU and an Institute for Supply Management board member.
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_July-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.