South Jersey manufacturing firms reported a fifth consecutive monthly contraction of production activity in September, though outlook for completing new orders and shipments in the months ahead was more optimistic than in previous forecasts.
According to the regional Business Outlook survey today released by the Federal Reserve Bank of Philadelphia, nearly 23 percent of manufacturers indicated declines in business activity through Sept. 18 — down from 30 percent of firms reporting a decrease in August, yet exceeding the 20.7 percent reporting increases this month.
"Instead of seeing more declines in activity like we did in previous months, we're seeing more flat activity in September," said Michael Trebing, an economic analyst for the bank. "Although there were negative readings for our broadest indicators, their levels showed some gradual improvement in getting closer to zero, which suggests stabilization in the industry."
Compared to previous months' future outlook readings, a greater share of manufacturers expects the industry to rebound within the next six months.
However, for the remainder of the third quarter of 2012, 47 percent of firms anticipate a slowdown in production activity, compared to the 35 percent expecting a pickup. In addition, more manufacturers predict a deceleration in activity for the final three months of the year than those foreseeing some business growth.
"We're seeing some improvement in the six-month indicators, but not nearly as big as a jump in expected activity as we've seen before," Trebing said. "Manufacturers are hopeful the declines over the rest of the year will start to recede with the growth they're expecting going into first three months of 2013."
While the number of firms in the region looking to increase employment through March 2013 surpassed those planning layoffs in the same period, 22 percent reported decreasing headcount between Aug. 15 and Sept. 18, compared to the 15 percent that added workers.
Statewide, manufacturers dropped a total of 2,700 jobs in August, according to data released today by the New Jersey Department of Labor and Workforce Development. The sector's last reported monthly employment increase was in October 2011.