The growth spurt by local manufacturers stretched into its sixth month during August, but the pace of the expansion cooled a bit, a local purchasing managers group reported.
With the flow of new orders to local factories remaining robust and hiring on the upswing, manufacturers in the Buffalo Niagara region continued to grow last month, even as the pace of overall production increased a little more slowly.
While a new survey of local purchasing managers found that growth rates had slowed from the one-year high set during July, the pace of the expansion at the region’s factories still was the second-highest since that July 2012 peak.
Jay K. Walker, the Niagara University economist who compiles the report, said the survey shows that local factories have been growing faster than a comparable nationwide index for the last six months – a notable turnaround from the general weakness that the region’s manufacturers endured during the late summer of last year through the late winter of this year.
The National Association of Purchasing Management – Buffalo said its index of business activity at local factories show growth cooled during August but still managed to extend a growth streak that begin in March. The group’s index eased to 57.2 last month from 61.4 during July, as new orders and employment strengthened and commodity prices took a rare downward turn. An index reading of more than 50 signals growth.
But those gains were partly offset by slower production growth, as two of every five managers surveyed reported declining output at their companies during August – double the July level. That pushed the group’s production index down to 57.2 from the nine-year high of 73.4 it set during July.
The flow of new orders strengthened for the second straight month, with the group’s order index rising to a four-month high of 64.3, mainly because fewer firms reported a drop in their overall order flow.
Local factories added to their work forces for the third straight month, increasing the pace of that hiring slightly. The group’s employment index improved to 59.8 from 54.9 in July as the percentage of firms adding workers doubled to 40 percent last month from 20 percent in July.
Inventories, which jumped to their highest levels since last summer during May, grew more slowly during August, extending the streak of expanding stockpiles to six months.
The group’s commodity price index reported a decline in prices for the first time in 4½ years, as just 10 percent of the managers surveyed noted an increase in prices during August, down from half in July.