October 5, 2016

S.E. Michigan Purchasing Managers Index shows expanding economy amid presidential uncertainty

DETROIT—The Southeast Michigan Purchasing Managers Index (PMI) came in at 60.2 for September 2016, a strong reading consistent with the three-month average of 60.6. A PMI greater than 50 generally signifies an expanding economy.

“The index has maintained a value of more than 50 since June 2014, an impressive 26-month streak of economic expansion for Southeast Michigan,” said Tim Butler, associate professor of global supply chain management in Wayne State University’s Mike Ilitch School of Business, who interpreted this month’s results.  

Components of the index influencing the strength include the production index at 59.4, the new orders index at 68.8, and the employment index at 62.5. Commodity prices are down slightly to 46.9, although survey respondents did not identify any particular commodities that were up or down in price.

All respondents who commented addressed the impending presidential election as a factor in the economy. Some predicted economic stabilization no matter which candidate wins, noting pre-election uncertainty is cast over the economy until the results are in. In the health care industry, for example, such uncertainty stems from what changes will be made to the Affordable Care Act under a new administration.

“Uncertainty is typical at this stage in the presidential election process. That said, 81.3% of respondents anticipate that the economy will remain steady or become more stable over the next six months. When the votes are tallied, a clearer picture of the future economy will emerge,” 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_September-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


Timothy Butler
Phone: (313) 577-9810
Email: timothy.butler@wayne.edu
Nitin Paranjpe
Phone: (248) 292-0208
Email: ai8668@wayne.edu

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