|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, decreased from 50.0 in July to 46.2 in August. The decrease was mostly attributed to weakness in new orders and production, down 8.1 and 17.8 index points, respectively. (A PMI over 50 indicates expanding manufacturing activity, a PMI below 50 indicates contracting activity, and a reading of exactly 50 indicates no expansion or contraction.)
Trucking and Railway
Recent indicators suggest that freight demand remained weak in July but is gradually improving. According to the American Trucking Associations (ATA), truck tonnage levels declined 10.4 percent in July from a year earlier, a smaller decline than in the previous three months. Cass Information Systems, a major U.S. processor of payment transactions for freight companies, reported that its August 2009 shipment index fell 16.6 percent from a year earlier. This decline was also less dramatic than the declines seen in some recent months.
The Association of American Railroads reported that in August, total rail carloads and intermodal shipments were down 20 and 15 percent, respectively, from a year earlier. Most industry volumes continued to post double-digit declines.
According to U.S. Department of Commerce data, the value of international shipments passing though District ports continued to deteriorate through July. Regional imports fell 18.6 percent on a year-over-year basis, following a 12.3 percent decline in June. All regional ports reflected widespread softening of demand for imported goods. Exports also declined 5.2 percent from a year earlier. Exports declined the most at ports in Tampa, Savannah, and New Orleans, led by lower shipments of autos, industrial goods, and farm products.
The Energy Information Administration (EIA) reported a 27.1 million barrel (14 percent) decline in Gulf Coast crude inventories since the seasonal peak in mid-April. Despite the decline, stocks remain above their average range for this time of year. Gulf Coast gasoline inventories were down 10 percent over the eight weeks ending September 11, though they remain well above their seasonal average.
According to the EIA's short-term outlook, national crude oil production is expected to average 5.24 million barrels per day in 2009 and increase 1 percent in 2010, with output from several new production platforms in the Gulf of Mexico coming online. The region's year-to-date crude oil production has averaged 75,000 barrels, or 5 percent above the same period in 2008.
According to the Baker Hughes Rig Count, on average, 31 rigs operated off the Gulf Coast during August, 34 rigs less than a year earlier. Gulf Coast refineries operated at 86 percent of their operable capacity in June, down 3 percentage points from year-earlier levels.
District-assembled vehicle production through mid-September declined 49 percent from a year earlier. On a national level, production declined 47 percent.
Industry contacts expect some production increases in coming months in response to low vehicle inventory levels that persisted prior to the recent federal rebate program. Currently, the District's production capacity is operating at about 2.2 million vehicle units. Auto producers such as Kia Motors, Volkswagen, and Toyota are planning to add 600,000 new vehicles to the District's production capacity in the next two years. Hyundai and Honda have also announced increased production schedules and extended hours due to stronger sales and low vehicle inventories.