Report for March 2014

Sponsors:
San Bernardino County Economic Development Agency Riverside County Economic Development Agency

(Editor’s note: The Inland Empire (I.E.) is a metropolitan area and region of Southern California. It is situated directly east of the Los Angeles metropolitan area.)

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PMI DROPS TO 49.0 AFTER 6 MONTHS OF GROWTH

According to Barbara Sirotnik (Director, Institute of Applied Research), and Lori Aldana (Project Coordinator, Institute of Applied Research), “This month’s PMI (49.0) is a decrease from last month’s 50.3. This is the first time since August, 2013, that the figure has dropped below 50. But one month’s figures do not establish a new trend. If the PMI remains below 50 for two more months, a new trend of decline in the manufacturing sector will have been established. And if the figure were to drop precipitously to 43.2 and remain at that level for three months, the overall Inland Empire economy would generally be in decline, as it was in 2008. We don’t see that happening at this point.”

“Production decreased from 51.6 last month to 48.3 this month, and New Orders increased from 48.5 to 50.0 (not a vast improvement since the index of 50 indicates that new orders are unchanged from February, a month which saw a decrease in orders). The Employment Index which had remained at 50 for three months showed a decline to 46.7. Supplier deliveries are continuing to slow (51.7). Slowing deliveries can be a hopeful sign since it often takes longer to deliver supplies when demand is high. But since production and new orders are down, slowing deliveries might just mean that suppliers of raw materials have reduced their work force and thus can’t deliver in a timely fashion. The next two months of data will be especially important for determining the meaning of this index.”