A state space model is constructed so that a state variable representing the unobservable state of the economy is estimated from information on new orders, production, employment, supplier delivery time, and finished inventory obtained from the purchasing managers’ sur-vey for Georgia. This state variable captures the co-movements of the time series used in its construction and serves as an economic indicator for Alabama, Florida, Georgia, North Caro-lina, South Carolina, and Tennessee. Even though this economic indicator is estimated from information from the purchasing managers’ survey on manufacturing activity for just Geor-gia, it produces reasonable forecasts for the real growth rates of the gross domestic products of Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee for 1991 through 2008.


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