IE Business Daily Business news for the Inland Empire.
Manufacturing in the Inland Empire bounced back in January, one month after that sector fell to its lowest rate in six years.
The Inland Empire’s purchasing managers index last month was 51.3, according to data released Monday by the Institute of Applied Research and Policy Analysis at Cal State San Bernardino.
Although not spectacular, that number was still a cause for relief and maybe a mild celebration at the institute, which publishes a report on manufacturing in Riverside and San Bernardino counties on the first working day of every month.
Not only did it top 50, the dividing line for whether manufacturing is expanding or contracting, but it overwhelmed the 42.1 index that was recorded in December, an abysmal number that caught most observers by surprise and was the lowest index recorded since 2009.
“We were happy to see it,” said Barbara Sirotnik, director of the institute and a co-author of the report. “There is undoubtedly some seasonality at work, and it could have been that the December number was so bad that it had to come back up. We’re just glad that it did.”
The index must be above or below 50 for three consecutive months before a trend can established, so the index must stay up for two more months before it can be said the Inland Empire manufacturing sector is growing.
Possibly the best news within the report was the month-over-month increase in new orders – up 18.7 to 58. 1 – and production, which rose 18.8 to 56.7 during that time. That both of those numbers are on the rise and comfortably above 50 indicates manufacturers probably expect consumers to keep buying during the next few months.
Still, the manufacturers surveyed expressed little confidence in the direction of the local economy during the next three months. Only 11 percent said they expect the Inland Empire economy to improve during that time, while 48 percent said they expect it to stay the same and 41 percent said they anticipate it getting weaker.
“That was the one thing I thought was disappointing,” Sirotnik said, “With the rest of the report so good, I expected to see more confidence in the economy.”
