Business improved for a second straight month during December for local manufacturers, although a survey of local purchasing managers also found that the pace of that growth slowed.
The slowdown in growth during December continued the topsy-turvy pattern of growth and decline that has characterized the local manufacturing sector since the summer.
“Conditions were improving, although more mixed,” said Jay K. Walker, the Niagara University economist who compiles the report.
The Institute of Supply Management – Buffalo’s business activity index slowed to 51.8 during December from 58.7 in November – a level that indicates an economy that grew more slowly last month. Until December made it a two-month growth spurt, the monthly index had been alternating between growth and decline since July. Since the summer, the statewide Empire State Manufacturing Survey, compiled by the Federal Reserve Bank of New York, has shown five straight months of decline.
“I’d call this month’s results mixed as I think eventually the broader geographical trends of the past couple of months may catch up with us in Western New York,” Walker said.
The stock market’s early January plunge, coupled with fears of a slowdown in China’s growth, also could put a damper on local manufacturers in the coming months, Walker warned.
“With all the uncertainty since the start of the year, I suspect we might have a weak start to the year when the January results come in,” he said.
The local purchasing managers indicated that December was a mixed month. Production continued to rise at a brisk pace, while new orders slumped for the first time since September. Factory employment rose for the third straight month, but the pace of hiring slowed sharply. Commodity prices fell for the fourth time in five months as energy costs dropped, while inventories shrunk for the fifth straight month.