During August, the metro Detroit Purchasing Managers composite index fell 6 points from its July level.
The measure of production, new orders, employment, inventory, vendor deliveries, and commodity prices was 48.2. Readings below 50 indicate that manufacturing is contracting, said economist and Walsh College Director of Doctoral Programs David Allardice. Nearly 800 managers of the Detroit chapter of the National Association of Purchasing Managers were surveyed by Allardice last month.
Within the index, employment rose 5.7 points, production rose 7 points; and prices fell 9.3 points.
Seventy-six percent of the managers said that they believe the economy is in a recession.
“Concerns with the future and poor current business conditions were cited as the reason respondents believe the economy is in a recession,” Allardice said. “Looking six months ahead, 28 percent expect a less stable environment regarding business prospects. This is down 9 percentage points from July.”
Only 28 percent believe the business environment will be more stable early in 2009, which is up 18 percentage points from July. About 44 percent believe that conditions (which are not favorable) will be about the same early in 2009.
One respondent summed up economic issues facing supply chain management during August: “The recession; volatility of commodities; the change in weather conditions (winter); currency exchange rate; housing crisis; lack of automotive sales; and the increase in truck and rail rates.”
Some purchasing managers anticipate more price increases early in 2009. Others cite metals and oil market speculation as factors impacting prices.
Walsh College, founded in 1922, is Michigan’s largest graduate business school. The College offers upper-division bachelor’s, master’s and doctoral business and technology degree and certificate programs to 4,600 students at campuses in Troy, Novi, and Clinton Township, as well as online.
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