Southeast Mich. economy stable but slowing slightly, survey of purchasing managers indicates

December 1, 2009

The Southeast Michigan economy is stable, but forward progress is stalling, according to a survey of purchasing managers compiled by the Institute for Supply Management - Southeast Michigan and the Wayne State University School of Business Administration.


Latest survey results indicate a drop in the Purchasing Managers Index (PMI), a tabulation known to be an early indicator of developing economic conditions. The November PMI dropped to 49.5 after rising above 50 for three consecutive months. An index number above 50 generally indicates an expanding economy, while below 50 indicates a softening trend. The number for October was 51.3.

"Production and new order activity showed continued growth, with inventory levels of raw materials and finished goods declining, indicating a strengthening of demand," says Nitin Paranjpe, Ph.D., a member of the supply chain management faculty at WSU's business school. Dr. Paranjpe analyzed the survey results.

Other indicators showed commodity prices on the rise in November, though at a slower rate than the previous month. "Part of the raw material price increases can be blamed on the falling value of the U.S. dollar in overseas markets, though this has yet to percolate through to the consumer price index due to weak demand on the part of the consumer," Paranjpe believes.

At the national level, constrained bank lending and a weak job market may prevent expansion in the national economy from being as robust as the Federal Reserve had hoped, Paranjpe explains. Additionally, employment growth appears to have stalled in Michigan after modest gains earlier in the quarter," he notes.

Varying comments by survey respondents reveal the unstable nature of the economic revival, but about half of the respondents indicated that they expect the environment to remain the same in the near future. The full report is available on the economic surveys page at

The latest survey report is the first released jointly by ISM and the WSU School of Business Administration although the local index has been in use for about half a century, according to Dr. John Taylor, associate professor and director of supply chain programs at Wayne State. "The Report on Business Survey and Purchasing Managers Index has used the same methodology for more than 50 years to serve as an early indicator of how the Southeast Michigan economy is doing," Taylor says. "The School of Business Administration is pleased to partner with ISM to share this important index of economic activity in our region."

The Institute for Supply Management (ISM) - Southeast Michigan Report on Business with its Purchasing Managers Index (PMI) is compiled monthly from the survey responses of purchasing managers in Southeast Michigan's manufacturing and non-manufacturing sectors. The survey is conducted by the Institute for Supply Management - Southeast Michigan and analyzed by faculty from the Global Supply Chain Management department at the Wayne State University School of Business Administration. This local report mimics a similar national report from the Institute for Supply Management, which measures the PMI for the U.S. as a whole and is often used by policymakers, forecasters and investors to obtain an early read on developing economic conditions. For more information and past reports, visit the economic surveys page of the ISM Web site at

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.

The School of Business Administration at Wayne State University provides quality business education through degree programs accredited by AACSB International. Wayne State University is a premier urban research university offering more than 350 academic programs through 13 schools and colleges to more than 31,000 students.