The eight-month growth spurt by manufacturers in the Buffalo Niagara region is losing a little steam.
Local manufacturers said their business expanded at a slightly slower pace last month, pushing the pace of growth at local factories to its lowest level since the uptick began in March.
The slower October expansion, which nevertheless extended the growth streak among Buffalo Niagara manufacturers to eight months, marked the second straight month that the pace of growth at local factories slowed, according to a survey of local purchasing managers.
The slowdown stemmed from a slump in hiring at local factories, coupled with slower growth in the flow of new orders to the region’s manufacturers, which offset a slight uptick in production and rising inventories.
Jay K. Walker, the Niagara University economist who compiles the monthly report for the Institute of Supply Management – Buffalo, said seasonal factors in hiring could have played a big role in the modest slowdown in overall growth last month. Otherwise, the manufacturing report has shown fairly stable conditions in local manufacturing over the last four months.
“Employment seems to be the most notable soft spot,” Walker said. “It looks like the same thing happened last year around this time, so it’s possible that it’s a seasonal issue. Otherwise, the results were mostly favorable, not a lot of large variations the last few months.”
The group’s business activity index slipped to 55.5 last month, down from 57.4 during September. While the index remains below the 12-month high of 64.2 that it hit in June, it still is comfortably above the tipping point of 50 – the dividing line between a growing and contracting manufacturing sector – for the 18th time in the last 20 months.
The biggest change during October came in the job market, where local manufacturers cut back on their hiring.
With just 1 in 10 manufacturers surveyed adding workers, down from a little more than a quarter during September, the group’s employment index turned negative for the first time since May and hit its lowest level since February.
At the same time, the flow of new orders, while continuing to grow, expanded at its slowest pace since August, as two of every five managers said their firms booked less new business last month, compared with slightly more than a quarter in September.
Production continued to grow steadily, with 2 in 5 firms increasing their output last month, up from 36 percent in September. That extended the region’s streak of rising production to 10 months.
Local manufacturers continued to build their inventories, which grew to a five-month high during October.
Commodity prices continued to rise, but at their slowest pace since June.