The Coronavirus outbreak may have put its first dent into the Inland Empire economy.
The region’s purchasing managers index, which measures the state of manufacturing in Riverside and San Bernardino counties, fell to 43.3 in March, the Institute of Applied Research and Policy Analysis at Cal State San Bernardino reported this week.
That number was 57 in February, making the February-to-March decline of 13.7 the largest since December 2015, when the index fell 10.2 points, to 42.1.
Any number below 50 means the Inland region’s manufacturing sector is shrinking; 50 or above means it’s expanding, with three consecutive months in either direction needed to establish a trend.
The saving grace to the March report is that there’s no question what caused the severe drop, said Barbara Sirotnik, director of the institute and a co-author of the monthly index.
“This month’s low figure is not surprising to any of us considering the pandemic ravaging the world,” Sirotnik wrote in the report. “Non-essential businesses are shuttered and residents in most states are ordered to stay home. Some people are able to work from home and are continuing to get a paycheck. They will keep buying, assuming the products can be delivered.
“But others have been laid off and are barely holding on.”
Sirotnik noted that the indicators that make up the bulk of the index – production, new orders, Inventory, and employment – dropped significantly below the 50 percent last month.
Confidence in the local economy also plummeted: 96 percent of the purchasing mangers surveyed said they expect the Inland economy to get weaker in the next three months, and four percent said they expect it to stay the same. None said they believe it will get better, the report stated.