Manufacturers in the Buffalo Niagara region seem to be treading water.
A survey of local purchasing managers found that activity slowed slightly at local factories during February – the second decline in three months. But the pace of the declines was very small, and because they were sandwiched around a slight uptick during January, the Niagara University economist who compiles the monthly report said the up-and-down results since December are mostly a sign of stability among local manufacturers.
“It appears as if we’ve hit a relatively stable period in manufacturing activity,” said Niagara economist Jay K. Walker.
Since December, the manufacturing survey has bounced slightly above and below the statistical dividing line between growth and decline.
Walker said the differences are too small for the index to be signalling a shift to an outright decline after a year where the indicator showed fairly steady growth at local factories.
But the February decline also is a sign that factory growth has slowed.
“It was a mediocre month,” Walker said. “Employment was weak again, but inventories pulled back again. Hopefully with the lower inventories, we may have an uptick in employment before too long.”
The National Association of Purchasing Management-Buffalo’s business activity index slowed to 49.4 during February, a level that indicates a slight decline in factory activity, compared with January’s index of 51.3, which is a sign of modest growth. For the past three months, the index has flip-flopped above and below the tipping point of 50 that is the dividing line between a growing and contracting manufacturing sector.
After spiking during the early fall to the strongest growth rates since the Great Recession, business cooled but continued to expand during November, only to turn modestly downward in December and then return to slow growth during January and then back to a slight decline in February.
Production, which slumped badly during December, picked up steam for the second straight month during February, with three of every eight managers surveyed reporting increases in output.
The flow of new orders grew for the eighth straight month, but the pace of that growth was the slowest since June and was only slightly above the break-even point.
Hiring remained weak for the fifth straight month, with none of the purchasing managers surveyed indicating that their companies hired more workers last month.
The vast majority said employment levels were flat during February, with just one in eight of the managers surveyed saying their firms cut jobs.
Inventories shrunk for the third straight month, while commodity prices rose at their slowest pace since December, the survey found.