DETROIT – The good news is the Southeast Michigan Purchasing Managers Index leaped seven points in October indicating a strong local economic outlook. The bad news is one third of these respondents said they aren’t confident the upward trend will hold in part because of the uncertainty of the presidential election on Nov. 8.
Looking at the raw numbers, the Index was 67.2 for October 2016, boosting the three-month average nearly four points to 64.5.
“The index has maintained a value greater than 50 since June of 2014, an impressive and remarkable streak of growth and economic expansion that seems to parallel the underlying resurgence of the domestic automobile sector in Southeast Michigan with record profits being reported by automakers. Paradoxically, in spite of the strength in the economy, survey respondents noted that their expectations of the business environment six months into the future were not very robust,” said Nitin Paranjpe, a finance faculty member in Wayne State University’s Mike Ilitch School of Business, who interpreted this month’s results.
The Employment Index powered ahead from 62.5 to 75.0, indicating that the healthy summer employment trend has continued into autumn in Southeast Michigan. In addition, the Production Index rose sharply to 73.5, a 14-point gain over last month. The New Order Index increased as well, hitting 70.6.
“The numbers are the highest they’ve been all year, but nonetheless many production managers are feeling uneasy due to the country’s political divisiveness. One way or another, the election is going to have an impact on the 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_October-2016.pdf.