Inland manufacturing sector still expanding … barely

It was mixed news in the Inland Empire’s manufacturing sector in April.

First, the good news:

The region’s purchasing manager’s index last month was 52.1, according to data released Monday by the Institute of Applied Research and Policy Analysis at Cal State San Bernardino.

That was the eighth consecutive month the index has been above 50, meaning the Inland region’s manufacturing sector expanded during each of those months. Anything below 50 means the manufacturing sector is getting smaller.

Now for the not-so-good news:

The index was down eight points from March, when it was calculated at a robust 60, according to the institute’s Inland Empire Report on Business, which is published on the first work day every month.

That’s a steep month-over-month drop, but it’s no reason to panic because, bottom line, the number is still above the 50 benchmark, said Barbara Sirotnik, director of the institute and a co-author of the report.

“The manufacturing sector is still growing, it’s just that the rate of growth has slowed, for a lot of reasons,” Sirotnik said. “We’re still recovering from the recession, and the port strike has had an impact. A number of factors are causing it.”

However, a slow recovery is not necessarily a bad thing, particularly when the jobless rate continues to decline, as is the case in the Inland Empire.

“In a way this is better,” Sirotnik said. “It’s a measured recovery, which means it’s not going to overheat.”

Perhaps the greatest reason for concern in the April numbers was new orders, dropped to 46.6 last month, and drop of 16 from March.

“We’re going to be watching that number very carefully,” Sirotnik said. “New orders tell you whether people want to buy or not. We hope that drop was just an aberration.”

The Inland region’s purchasing managers are usually pessimists, and they didn’t change their tune last month: 30 percent said they expect the local economy to get weaker during the next three months, while 30 percent said they expect it to get stronger during that time.

The remaining 40 percent said they believe the local economy will remain unchanged, the report stated.