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Southeastern Manufacturing Survey

For Immediate Release Dec. 14, 1998

SOUTHEASTERN MANUFACTURING SURVEY IN NOVEMBER: PRODUCTION UP BUT STILL SOFT; CAPITAL SPENDING SLOWING

According to the monthly survey of southeastern manufacturers conducted by the Federal Reserve Bank of Atlanta, current indicators for manufacturing activity in the region strengthened slightly in November but remained soft compared with early this year. Current indexes for production, shipments, number of employees, employee workweek, new orders and backlogs improved in November, although the backlogs index remains in negative territory. The prices-received index continued its recent downward trend, while the prices-paid index edged up from a record low set in October. The new export orders index rose but remained in the negative range. The outlook indexes were mixed. Notably, the capital expenditures index continued to weaken.

The current production index in November rose to 9.4 after a mild increase to 4.0 in October. For November, the proportion of respondents reporting higher production edged up to 35.1 percent from 32.1 percent the previous month, while the proportion indicating a decrease slipped to 25.7 percent from 28.1 percent. The production index remains notably below levels seen during spring of this year.

The current activity indexes for both finished goods and materials inventories rose in November after both indexes had fallen in recent months.

Current price indexes remained soft. The prices-received index declined for the third consecutive month, setting a new series low. The prices-paid index edged up after setting a series low the prior month.

Currently, southeastern manufacturers generally see activity for their industry weaker at the national level than for their southeastern plants. The national industry activity index fell to minus 6.4 in November from minus 2.0 the prior month.

Outlook indexes were mixed in November. The outlook index for production slipped to 26.0 from 27.7 in October. Outlook indexes for shipments, new orders and backlogs were up slightly, while outlook indexes for the number of employees and the employee workweek were down. The outlook index for capital expenditures fell to its lowest level since February 1996. This series has been soft since midsummer of this year.


Summary of Southeastern Manufacturing Conditions
Diffusion Indexes
Seasonally Adjusted

Current Month Versus Prior Month
1998


November October (R) September

Production 9.4 4.0 -2.6
Shipments 10.1 5.0 3.7
New orders 8.1 2.2 0.7
Backlog of orders -4.9 -6.7 -1.0
Materials inventories 1.9 -8.5 3.4
Inventories of finished goods 0.6 -4.6 0.6
Number of employees 7.8 2.5 0.9
Average workweek 8.3 1.2 5.4
Prices received -19.3 -11.1 -7.6
Prices paid -13.4 -15.2 -6.8
New export orders -5.9 -12.4 -3.7
Supplier delivery time 3.8 6.9 6.1
Industry business conditions -6.4 -2.0 1.2

Six Months From Now Versus Current Month

November October (R) September

Production 26.0 27.7 27.0
Shipments 31.8 26.0 27.2
New orders 24.9 21.4 28.1
Backlog of orders 8.2 1.8 4.3
Materials inventories -1.5 1.4 -11.7
Inventories of finished goods -5.7 -4.8 -15.1
Number of employees -0.6 13.8 3.6
Average workweek -7.8 -0.8 -1.1
Prices received 7.9 8.9 5.4
Prices paid 11.9 13.4 14.7
Capital expenditures 9.9 14.9 19.7
New export orders 16.2 9.5 -2.5
Supplier delivery time 3.9 -7.0 -6.2
Industry business conditions 21.7 12.0 8.8

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: November 1998 data