IAR’S INLAND EMPIRE REPORT ON BUSINESS
Report for June 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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THE INLAND EMPIRE MANUFACTURING SECTOR IS BACK IN GROWTH MODE
According to Barbara Sirotnik (Director of the Institute of Applied Research), and Lori Aldana (Project Coordinator, Institute of Applied Research), “This month’s PMI (53.5) remained above the baseline 50% mark for the third month in a row. Based on the methodology underpinning the PMI, which requires three consecutive months either above or below 50% in order to determine that a change in direction has occurred in the local manufacturing sector, it appears that the Inland Empire manufacturing sector has returned to growth mode (although the drop from last month’s 57.7 indicates that the rate of growth has slowed).”
“Production increased from 62.5 last month to 63.2 this month. New Orders registered a large drop from 64.1 to 51.5, but that figure still remains above the 50% mark, reflecting growth. The Supplier Deliveries Index increased from 48.4 to 52.9 this month indicating that delivery times are getting slower (which typically happens when business is booming and suppliers have a backlog of demand). Inventories decreased from 59.4 to 52.9. The “hardest hit” index was the volatile Employment Index which decreased from 51.6 last month to 47.1 this month. This may be partially due to employers preparing for the new minimum wage rate increase that will go into effect July 1, 2014. As one Purchasing Manager commented: “New hires were the result of the new minimum pay requirement of $9/hour. We added 7 full time positions and eliminated 14 temporary employees.” Exports showed a drop from last month’s 50.0 to 42.3 and Imports decreased from 50.0 to 46.7.”