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Local factories see slight pickup; new orders soar

The Buffalo Niagara region’s manufacturers got back on the growth track during March, due mainly to a surge in new orders, according to a survey of local purchasing managers.

The National Association of Purchasing Management said Buffalo’s index of business activity at local factories moved back into growth territory during March, reversing two straight months of weakness at the start of the year. The index improved to 50.9 in March, slightly above the reading of 50 that is the dividing line between growth and decline, after slipping below 48 in both January and February.

Jay K. Walker, the Niagara University economist who compiles the report, said the local manufacturing sector’s growth during March was tepid, although the trend appears to be turning positive, with factory executives reporting growth during three of the past five months.

“There does seem to be a slight upward trend from the lows experienced in the third quarter of 2012,” Walker said.

Most of that upward trend is coming from a surge in the flow of new orders, while other key indicators, from production to employment, continued to weaken, according to the report, which offers one of the earliest glimpses at how a key part of the local economy is faring.

The surge in new orders during March was a major reversal from the modest declines that the report found during the first two months of the year. The group’s new order index, which can be highly volatile from one month to the next, jumped to 72.2 – its highest level for any month since the group started compiling the index in its current format in 1999.

Seven of every 10 managers surveyed said the flow of new orders increased at their firms during March, while just one in 10 said their companies booked less new work.

“This shows some strength as the spring thaw continues to set in for Western New York in earnest,” Walker said.

But that strength was offset by continued weakness in production, which has declined during seven of the past eight months and slipped to a seven-month low of 40.2 during March from 43.2 in February. While three of every 10 managers surveyed said production rose at their factories last month, even more – four out of 10 – said output dropped.

As a result, hiring remained weak, with factory employment dropping for the eighth straight month. The group’s employment index slid to 45.2 last month from 49.2 during February, with none of the managers surveyed reporting that their firms expanded their workforce during the month, while 10 percent said their companies cut jobs.

Commodity prices rose during March at their fastest pace in a year, while inventory levels grew for the first time in six months.

Factory growth resumes

Month Index


March 50.9

February 47.7

January 47.8


December 55.2

November 51.1

October 45.4

September 49.0

August 46.8

July 65.1

June 54.0

May 56.2

April 61.6

Source: National Association of Purchasing Management – Buffalo

NOTE: Index reading above 50 indicates growth; below 50 indicates a decline