IE manufacturing does the two-step … again
Inland Empire manufacturing performed superbly in October, completing a two-month pattern that began in March when COVID-19 hit.
The region’s purchasing managers index was 61, up from 53.4 in September and 11 points above 50, the dividing line that determines whether manufacturing is expanding or contracting, the Institute of Applied Research and Policy Analysis at Cal State San Bernardino reported Monday.
Since March local manufacturing has posted two down months followed by two good months: March and April were 43.3 and 41.8, respectively, followed by 56.9 in May and 55.7 in June.
In July and August, the index fell back to 42.9 and 47.
“This cycle obviously reflects an economy trying to get back on stable footing,” said Barbara Sirotnik, director of the institute and a co-author of the index, in a statement. “But it takes three months above 50 to establish a new trend of growth, so it will take one more month of positive figures before we can state that the Inland Empire manufacturing sector and economy have returned to growth mode.”
The categories that make up the index performed well last month: production and new orders were up, as were inventory, new orders, and employment. Supply deliveries slowed, a sign that manufacturers are busy.
Thirty-six percent of the manufacturers surveyed said they expect the local economy to get better during the next three months, while 37 percent said they expect it to stay the same. Twenty-nine percent said they expect it to weaken during that time, according to the index.