County’s Manufacturing Sector Takes A Dive In The First Quarter Of The Year

Following in the footsteps of the national manufacturing sector, Orange County’s manufacturing sector contracted in the first quarter of 2001. Production, new orders and employment all declined substantially, while commodity prices continued to increase. At the national level, the contraction continued for the second consecutive quarter.

Overall, the Composite Index decreased from 52.7 in the fourth quarter of 2000 to 43.7 in the first quarter of 2001. Although the slowdown was anticipated, the size of the drop was steeper than expected by the purchasing managers.

	Orange County
	United States

The Composite Index consists of the results of the survey of Orange County purchasing managers regarding changes in the levels of production, employment, new orders, inventories of purchased materials and supplier deliveries.

Production was reported to have declined most rapidly in the following industries: Rubber & Plastics Products; Industrial & Commercial Machinery & Computer Equipment; and Electronic & Other Electrical Equipment & Components. Production was reported to have increased most rapidly in the following industries: Food & Kindred Products; Chemicals & Allied Products: Rubber & Plastics Products; and Transportation Equipment. New orders were reported to have declined most rapidly in the following industries: Chemicals & Allied Products; Rubber & Plastics Products; Industrial & Commercial Machinery & Computer Equipment; and Instruments. New orders were reported higher in the Fabricated Metals Industry. Employment was reported to have decreased most rapidly in the following industries: Apparel; Rubber & Plastics Products; and Industrial & Commercial Machinery & Computer Equipment. Employment was reported to have increased most rapidly in the following industries: Fabricated Metal Products; and Transportation Equipment.

The purchasing managers have also reported the following:

• The quantity of purchased materials dropped substantially compared to the fourth quarter of 2000.
  
  
• Production, new orders and employment dropped in the High-tech industries.
  
  
• The Non-durable goods industries contracted more than the other industries.
  
  
• Production and new orders dropped in the Surgical, Medical, & Dental Instruments & Supplies industry.

This report is published quarterly by the A. Gary Anderson Center for Economic Research of Chapman University for more information please contact Dr. Raymond Sfeir, Professor of Economics at (714) 997-6693.