|Source: Kennesaw State University Econometric Center|
|ATA Trucking Index|
|Growth of Southeastern International Port Shipments|
|Source: U.S. Department of Commerce|
|District-Assembled Vehicle Production Growth 2008–09|
|Source: Automotive News|
Kennesaw State University's Southeast Purchasing Managers Index (PMI), a gauge of regional manufacturing, increased from 46.7 in September to 49.2 in October. The increase was mostly attributed to the strength in new orders and production components, up 6.7 and 4.0 index points, respectively. (A reading above 50 indicates expanding manufacturing activity; below 50, contracting activity; and exactly 50, no expansion or contraction.)
Trucking and Railway
Recent indicators suggest that freight demand remained weak in October but declined at a slower pace than in previous months. According to the American Trucking Associations (ATA), truck tonnage levels declined 5.2 percent in October from a year earlier, the smallest year-to-year drop since November 2008. Meanwhile, Cass Information Systems, a major U.S. processor of payment transactions for freight companies, reported that their October shipment volume fell 12.3 percent on a year-over-year basis, up slightly from last month.
The Association of American Railroads reported that, through October, regional rail shipments continued to run below 2008 levels for most industry categories. Although shipments of autos and chemicals declined at a slower pace than in earlier months, shipments of construction materials (lumber, stone, sand, and gravel) still fell at double-digit rates.
According to U.S. Department of Commerce data, the value of international shipments passing though District ports continued to decline. Regional imports fell 34 percent on a year-over-year basis following a 24 percent drop in August. All regional ports experienced widespread weakening in demand for imported goods. Imports declined the most for petroleum, vehicles, and capital goods. Exports declined 21 percent from a year earlier. Exports declined the most at ports in Tampa, New Orleans, and Mobile, led by lower shipments of autos, chemicals, and industrial goods.
The Energy Information Administration (EIA) reported that Gulf Coast crude inventories have declined since early October, falling by 12.7 million barrels over the five weeks ending November 13. Crude stocks are near the middle of their average range for this time of year. Gulf Coast gasoline inventories are up 1.3 percent since October 9 and remain slightly above their seasonal average.
Production and Refining
According to the EIA's short-term outlook, national crude oil production is expected to average 5.33 million barrels per day in 2009 and increase to 5.56 million barrels per day in 2010. The EIA noted that output from several new production platforms in the Gulf of Mexico is expected to account for more than 12 percent of total U.S. crude production by the fourth quarter of 2010. District states produced an average of 1.5 million barrels of crude oil per day through November 13, up 15 percent from the same period last year.
Gulf Coast refineries operated at 87.1 percent of their operable capacity in August, up 2.5 percentage points from July and 1.5 percentage points from year-earlier levels.
District-assembled vehicle production in October declined 37 percent from a year earlier; nationally, production declined by 38 percent.
According to the Monthly Autocast, the District plants' utilization rate, defined as the ratio of vehicle-production volumes to plants' auto-assembly capacities, was at 42 percent in October, up slightly from 40.5 percent in September. The utilization rate was 68 percent a year earlier.
The region's automobile production outlook is mixed. Recently, the Hummer brand, which is manufactured by General Motors (GM) in Shreveport, La., was sold to Chinese investors. GM will have production responsibilities until 2010 but plans to close the northwest Louisiana plant by 2012. GM is also halting production of the Traverse crossover at its Spring Hill, Tenn., plant. Production of this CUV will move to a Michigan plant, and the Spring Hill facility will be placed on standby status. KIA Motors, a subsidiary of Hyundai, recently began small-scale production of its Sorento crossover at its West Point, Ga., plant, with annual production projected at 100,000 vehicles by late 2010.
Beyond next year, the region's production capacity will be enhanced by another 300,000 vehicles coming from Volkswagen in 2011 and Toyota in 2012.