The Worst May Be Over For The County’s Manufacturing Sector

Although still in a contractionary mode, the manufacturing sector of Orange County contracted at a slower pace in the second quarter of 2001 compared to the first quarter. Unlike the first quarter, however, production did not decline, but new orders and employment did, while commodity prices increased only marginally. At the national level, the contraction continued for the third consecutive quarter.

Overall, the Composite Index increased marginally from 43.7 in the first quarter of 2001 to 45.8 in the second quarter. This slight improvement may be the beginning of the recovery of the manufacturing economy in Orange County.

	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: Chemicals & Allied 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; Rubber & Plastics Products; Fabricated Metal Products; Transportation Equipment; and Instruments. Commodity prices were reported to have increased most rapidly in the following industries: Food & Kindred Products; Rubber & Plastics Products; and Stone, Clay & Concrete Products. New orders were reported to have declined most rapidly in the following industries: Lumber & Wood Products; Chemicals & Allied Products; Industrial & Commercial Machinery & Computer Equipment; and Miscellaneous Manufacturing. New orders were reported higher in the Rubber & Plastics Products industry and the Fabricated Metal Products industry. Employment was reported to have decreased most rapidly in the following industries: Industrial & Commercial Machinery & Computer Equipment; Electronic & Other Electrical Equipment & Components; and Miscellaneous Manufacturing. 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:

• A substantial decrease in the quantity of purchased materials for the second consecutive quarter.
  
  
• The decline in production in the High-tech industries, and the performance of the High-tech industries in general were the most severe since this survey was started.
  
  
• The durable goods industries other than High-tech contracted at the same pace as the manufacturing sector.
  
  
• The Non-durable goods industries remained stable in the second quarter of 2001.
  
  
• Production in the Surgical, Medical, & Dental Instruments & Supplies industry increased.

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.