A new report by the Institute of Applied Research at Cal State San Bernardino contained generally good news for the Inland Empire economy.
“The October Inland Empire Purchasing Managers’ Index (PMI) increased to 54.0 in October from September’s 49.7," said Dr. Barbara Sirotnik and Lori Aldana in the Inland Empire Report on Business for November.
"For the past few months, the local PMI has shown a great deal of variability: it was 46.3 in June, 55.0 in July, 50.0 in August, 49.7 in September, and now it has increased back up to 54.0, showing growth in the local manufacturing sector and overall economy.”
The authors said there were some positive notes for this month's report.
"First, the Production and New Orders Indices (two of the key indicators in the PMI) both increased significantly. Production increased from 56.7 to 60.0 this month and New Orders increased from 53.3 to 63.3. The Employment Index also increased from 41.7 to 50.0 this month. Supplier deliveries dropped from 50.0 to 46.7, showing that deliveries were getting faster (a sign that suppliers weren’t as busy as before). Commodity prices dropped significantly from 66.7 to 51.7 this month, showing that inflationary pressures are easing a bit.”
However, countering this upbeat assessment was the fact that purchasing managers' optimism about the state of the local economy for the coming quarter has declined somewhat, the authors said.
"Only 11 percent predicted that the local economy will become stronger in the upcoming months (down from 16 percent). This is the lowest level of optimism since mid-2016. About a third (31 percent) believe the local economy will become weaker over the next quarter (up from 19 percent). Over half (58 percent) think the economy will stay the same -- a figure down from last month’s 65 percent," the authors said.
Last month, Sirotnik and Aldana noted that federal trade policies, a global economic slowdown, and the impeachment inquiry were all causing uncertainly for businesses and consumers alike.
"Nationwide, the stock market is doing well, and unemployment is at a 60-year low. The Inland Empire has continued to add new jobs. But the variability in the PMI could be a warning sign about the local economy," the authors said.