Buffalo manufacturers said business kept growing in February – just not as fast as in January.
With the flow of new orders remaining robust, production rising steadily and oil prices falling to help keep a lid on commodity costs, local manufacturers said business was better in February, according to a new survey of purchasing managers in the Buffalo Niagara region.
“Manufacturing looked good again, locally, last month,” said Jay K. Walker, the Niagara University economist who compiles the monthly report for the Institute of Supply Management – Buffalo.
The improvement during February stretched the growth streak for local manufacturers to seven months but showed that growth was slower than the full-throttle expansion indicated by the January survey, which pegged the pace of the increase at its fastest rate in more than a decade. Still, February’s growth was the second-strongest in the last 17 months.
Walker noted that the growth shown in the local survey was in line with the expansion in a nationwide poll by the Institute of Supply Management, which has seen slower growth for four straight months, as well as the results of the Empire State Manufacturing Index compiled by the Federal Reserve Bank of New York.
“We’re broadly in trend with what the national and state reports are saying, but we seem to be increasing at a bit of a faster pace,” Walker said.
The group’s business activity index slowed to 64.5 last month, from 73.7 in January, a level indicating that growth at local manufacturers last month was stronger than it had been in any single month since July 2004. An index reading of more than 50 indicates growth, while an index of less than 50 is a sign of decline.
The pace of production remained robust, although it slowed a bit from January. The flow of new orders also cooled from January’s high, with two of every nine managers surveyed saying their firms booked less new business in February, compared with none during January.
Local factories continued to add jobs, but the pace of hiring slowed from January’s 17-year high, with a third of the firms adding workers last month, down from more than half in January.
The continued drop in oil prices also is giving local manufacturers a break in their commodity prices, which held steady during February for the second time in the last four months. Inventories grew at a slightly slower pace, but the expansion still was the second-fastest in the last 17 months.