Most purchasing managers pessimistic about economy
January 04, 2013 6:07 PM
SAN BERNARDINO • A key economic indicator released Friday showed that the manufacturing industry in the Inland Empire stopped growing. But researchers say the overall economy of the region is continuing its slow recovery.
The Purchasing Managers Index for the Inland Empire decreased to 45.5 percent in December from 46 during the previous month, according to the Institute of Applied Research at California State University, San Bernardino. A PMI over 50 indicates growth.
PMI measures the state of the manufacturing sector and economy by asking purchasing managers whether production, new orders, inventory, employment and other elements of manufacturing have improved compared to the previous month.
December was the fourth straight month the PMI remained below 50, indicating the manufacturing sector is no longer growing, CSUSB researchers stated in a release.
“Purchasing managers’ optimism about the state of the local economy for the coming quarter continues to deteriorate,” they stated. “Only 13 percent believe the economy will be stronger, whereas 53 percent believe the economy will be weaker.”
They said some of the increased pessimism reflect business leaders expressing concerns in December before Congress took action on the fiscal cliff. December is also typically a slow month for manufacturers.
“Seasonally slow sales in real estate, automotive and recruitment categories not offset by strength in retail,” one purchasing manager said in the survey.
The production index sharply dropped to 37.5 percent in December from 47.6 the previous month. The new orders index also decreased to 37.2 from 43.8.
The good news is that employment is showing signs of improvement after three consecutive months of decline, researchers said.
One purchasing manager told them new housing construction in Arizona and Nevada is showing recovery so the company is selling more roofing material.
“Purchasing will pick up for the first quarter of the year,” another manager said.