Production rises sharply in area plants - The Buffalo News

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Production rises sharply in area plants

Local manufacturers say their business heated up during July, fueled by a spike in production and a strong uptick in the flow of new orders.

A new survey of local purchasing managers found that growth at the region’s factories picked up markedly last month, pushing growth at the Buffalo Niagara region’s factories to its highest level in a year. Production figures from local factories were the highest in nine years.

The solid growth during July extended the spurt at local factories into its fifth month, despite a slowdown in the pace of hiring by Western New York manufacturers and the continued sting from higher prices.

“We’ve tied together a few months of positive results locally,” said Jay K. Walker, the Niagara University economist who compiles the report that offers one of the earliest glimpses at how a key part of the local economy is faring. “We’ll see how it trends coming into the cooler weather.”

The National Association of Purchasing Management – Buffalo said its index of business activity at local factories show growth rose sharply during July to its highest level since July 2012, extending a growth streak that begin in March.

The group’s index strengthened to 61.4 last month, up from 53.2 in June, as production at local factories surged, and the flow of new orders to the region’s manufacturers grew for the first time in three months. That more than offset a slowdown in the pace of hiring by manufacturers. An index reading of more than 50 signals growth.

Much of the improvement during July came from a surge in production that saw half of the firms surveyed report an increase in output at their factories, up from a third during June. That pushed the group’s production index into growth territory for the first time since December – at 73.4. It was the highest reading for the production benchmark for any month since July 2004.

The strong July production is a sign of continued expansion “and possibly a bit of strength moving into late summer,” Walker said.

The recovery in production was accompanied by a rebound in the flow of new orders, which reversed a two-month decline to begin growing again during July. The group’s new order index rose to a three-month high of 59.9 during July, as half of the managers surveyed reported an increase in orders at their firms, up from 44 percent during June.

Local factories added to their workforces for the second straight month during July, although the pace of hiring, which grew for the first time in 11 months during June, slowed last month.

The number of firms adding workers dropped to 20 percent during July, down from a third during June, although the percentage of firms maintaining their workforce at the same size held relatively steady at 70 percent.

Inventories, which jumped to their highest levels since last summer in May, grew robustly again during July, extending the streak of expanding stockpiles to five months.

Commodity prices rose at a faster pace, reversing the slowdown in inflationary pressure that the purchasing managers noted in June.


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