The Buffalo Niagara region’s manufacturers grew at their fastest rate since before the recession during October, buoyed by a surge in new orders and production, a local purchasing managers group said Tuesday.
With more orders flowing into local factories since the beginning of summer, manufacturers have been stepping up production at their plants. Both production and the flow of new orders had their biggest monthly jumps in more than 14 years during October, according to a new survey by the National Association of Purchasing Management – Buffalo.
“We fared well,” said Jay K. Walker, the Niagara University economist who compiles the report.
And with new orders continuing to arrive at a healthy pace, Walker said it’s likely that production will remain strong at local factories in the coming months.
The October gains, coming after a similar spike in September, left the group’s business activity index at its highest level since July 2007, before the Great Recession began.
Walker noted that the local factories have been growing faster than a comparable nationwide index for the last eight months – a significant 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 group’s business activity index jumped to 66.1 during October, from 62.4 in September. That left it well above the 50 mark that separates a growing economy from a declining one.
Production surged for the second straight month, with a little more than half of the managers surveyed reporting that their companies increased their output during October, while none said output fell.
The flow of new orders, which has been strengthening for the last four months, jumped sharply during October. While a little more than half of the managers reported order growth, down from almost two-thirds during September, just 8 percent of the managers said their companies booked fewer new orders last month, down from 27 percent in September.
“This could foreshadow continued strength in production levels for the near term,” Walker said.
The one down note in the October report was a slump in hiring, which weakened for the first time in five months. Just one of every seven firms surveyed added workers last month, down from just over a quarter in September. Walker said the slowdown in hiring could be related to seasonal factors.
Inventories grew at their fastest pace since March 2011, while commodity prices fell for the second time in three months.