California Manufacturing Going Strong

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California’s manufacturing sector continues to be a robust performer with sustained expansion, according to a survey released Monday.


The quarterly survey of purchasing managers in California’s manufacturing sector by the A. Gary Anderson Center for Economic Research at Chapman University registered an index reading of 60.3 in the second quarter, up from 59.8 in the first quarter. Any reading over 50 indicates manufacturing sector expansion.


Although robust, the survey indicates growth in the manufacturing sector has slowed slightly from highs reached in 2005, particularly in the fourth quarter, which saw a 67.5 reading.


However, the state’s manufacturing sector still stacks up favorably compared to the rest of the nation, which saw an index reading of 55.2 in the second quarter, down slightly from 55.6 in the fist quarter.


All three major manufacturing industry groups in California high tech, durable goods (other than high tech) and non-durable goods grew in the second quarter. The high tech group turned in the best performance, jumping to 66.1 in the second quarter from 61.1 in the first quarter.


Also growing were the production rate (64.8 index rating), inventories (54.8) new orders (61.2), and employment (57.8). With the exception of employment, all these readings were higher than the first quarter.


The only sign of trouble in the report came from the commodity prices index, which jumped to 80.1 from 76. Commodity prices have averaged around an 80 index reading for the last two years; while that’s good news for companies that produce basic commodities, it’s bad news for manufacturers that have to pay higher prices for their raw materials.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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