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Southeastern Manufacturing Survey

For Immediate Release Oct. 15, 1997

SOUTHEASTERN MANUFACTURING SURVEY IN SEPTEMBER:
CURRENT ACTIVITY MIXED, WHILE OUTLOOK IMPROVES

According to the monthly survey of Southeastern manufacturers conducted by the Federal Reserve Bank of Atlanta, current production declined somewhat in September from August, while shipments, new orders and backlogs rebounded from declines reported a month earlier. Outlook indicators for these series generally improved. The current employment index fell slightly, while the outlook employment index improved. Current price series declined in September, while outlook price series changed little.

The production index in September slipped to 14 from 18 in August. The proportion of respondents reporting higher production also slipped to 36 percent in September from 38 percent the month before. This production number remains moderate, with the index ranging between 10 and 19 over the last nine months. Other indicators of current activity generally improved from August. Both shipments and new orders rebounded to near July levels, while the index for backlogs grew to positive 7 from minus 9 in August.

The current employment index was essentially stable since last month, while the workweek index increased but remained in the negative range. Current price indexes declined in September. The current raw material prices index fell to 8 from 13 in August. The prices received index dropped further to minus 5 from plus 2 in the prior month and was at its lowest level since December 1996. The current supplier delivery time index remained near the recent series high in August.

The outlook production index rebounded strongly, reaching 47 in September after declining to 32 in August. The production index in September is at its highest level since January 1993. Fifty-five percent of September's respondents expected higher output in coming months, while only 9 percent anticipated lower levels. Outlook indexes for new orders and shipments also improved. Respondents indicate they expect inventories to change little over the next six months. The outlook employment index increased from 10 in August to 13 in September. The outlook workweek index continued to increase, reaching its highest level since late last year. The outlook index for finished products rose slightly, while the raw materials prices index was unchanged. The index for capital expenditures continues to rise.


Summary of Southeastern Manufacturing Conditions
Diffusion Indexes
Seasonally Adjusted

Current Month Versus Prior Month
1997



September August (R) July

Production 13.6 18.3 10.4
Shipments 19.8 6.7 24.6
New orders 24.9 7.2 18.8
Backlog of orders 7.4 -8.6 14.2
Materials inventories 6.1 1.5 2.2
Inventories of finished goods 5.3 -1.5 3.6
Number of employees 4.5 5.8 9.9
Average workweek -1.6 -5.4 11.2
Prices received -4.7 1.7 10.7
Prices paid 7.8 13.1 7.6
New export orders 14.5 7.3 5.3
Supplier delivery time 7.1 8.4 1.0
Industry business conditions 9.0 15.8 23.4

Six Months From Now Versus Current Month


September August (R) July

Production 46.6 32.4 36.9
Shipments 43.2 26.7 43.5
New orders 37.4 31.8 38.9
Backlog of orders 12.7 9.2 2.7
Materials inventories -2.5 -2.4 -0.6
Inventories of finished goods -1.5 0.4 -2.5
Number of employees 13.0 10.2 8.1
Average workweek 7.3 4.7 -0.7
Prices received 22.1 19.9 26.3
Prices paid 20.4 20.4 33.4
Capital expenditures 20.1 18.0 13.5
New export orders 27.5 21.2 20.3
Supplier delivery time -2.5 -2.6 -9.0
Industry business conditions 38.2 27.9 38.0

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.

Summary of Southeastern Manufacturing Conditions: September 1997 data