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Southeastern Manufacturing Survey

For Immediate Release Aug. 12, 1998

SOUTHEASTERN MANUFACTURING SURVEY IN JULY:
CURRENT OUTPUT UP, CURRENT PRICES AND OUTLOOK ACTIVITY SOFTEN

According to the monthly survey of southeastern manufacturers conducted by the Federal Reserve Bank of Atlanta, the July index for current output rebounded, while shipments, new orders and price indexes continued to decline. Current employment indexes rebounded, while inventories were mixed. Current price indexes fell noticeably. Current and outlook new export orders indexes fell significantly. Outlook indicators generally weakened.

The production index in July rebounded to 21.3 from a revised 10.1 in June. The proportion of respondents reporting higher production in June slipped to 35.8 percent from 37.2 percent in June, while the proportion of respondents reporting declines dropped to 14.5 percent in July from 27.0 percent the prior month.

Shipments and new orders indexes, however, continued to decline. Inventory indexes were mixed as the materials inventory series moved lower, while the index for finished goods inventories rebounded slightly, turning positive once again. The new export orders index turned decidedly negative, setting a record low of minus 11.1. The supplier delivery time index continued to rise moderately.

Current price series softened once again. The prices received index slipped to minus 10.8 in July from minus 5.6 in June, reaching its lowest level since December 1996. The prices paid index continued its four-month slide, setting a record low in July of minus 15.1.

Outlook indexes generally declined. The outlook index for production fell to 31.0 in July from 36.2 in June. The outlook indexes for shipments, new orders, backlogs, number of employees, workweek, capital expenditures and new orders for exports declined in July as well. Both inventory outlook indexes moved up slightly. Outlook price indexes also rose slightly, suggesting that more respondents may see the current price weakness as temporary. The outlook index for new orders for exports reached a series low.


Summary of Southeastern Manufacturing Conditions
Diffusion Indexes
Seasonally Adjusted

Current Month Versus Prior Month
1998


July June (R) May

Production 21.3 10.1 24.5
Shipments 7.7 12.0 20.2
New orders 0.5 7.8 15.3
Backlog of orders 0.1 0.0 2.3
Materials inventories 0.2 2.6 14.0
Inventories of finished goods 6.3 -2.8 22.6
Number of employees 8.5 0.2 12.0
Average workweek 6.6 -1.4 9.9
Prices received -10.8 -5.6 0.8
Prices paid -15.1 -11.2 -0.8
New export orders -11.1 2.3 7.1
Supplier delivery time 8.8 5.2 1.7
Industry business conditions 3.4 11.7 17.4

Six Months From Now Versus Current Month

July June (R) May

Production 31.0 36.2 32.6
Shipments 29.5 30.6 32.6
New orders 22.2 23.6 29.3
Backlog of orders 7.9 11.9 12.4
Materials inventories -6.2 -8.3 -8.6
Inventories of finished goods -1.0 -2.2 -4.6
Number of employees 12.9 18.5 11.3
Average workweek -5.3 3.6 1.9
Prices received 12.5 10.9 14.2
Prices paid 18.3 14.2 16.6
Capital expenditures 14.9 24.7 22.5
New export orders 6.8 10.3 13.7
Supplier delivery time -2.2 -2.1 -3.4
Industry business conditions 15.5 24.3 29.4

R=Revised

 NOTE: The Atlanta Fed's survey covers the Sixth Federal Reserve District, which includes Alabama, Florida and Georgia and portions of Louisiana, Mississippi and Tennessee. The plants surveyed represent a cross section of industries in the region. For background on the Survey of Southeastern Manufacturing Conditions, see "Tracking Manufacturing: The Survey of Southeastern Manufacturing Conditions." Click here for historical data.

Chart 1
Chart 2

Summary of Southeastern Manufacturing Conditions: July 1998 data