Manufacturing activity at South Jersey firms expanded in October after five straight months of contraction, though employment in the industry fell to its lowest point in three years, an economist said.
The latest Business Outlook survey today released by the Federal Reserve Bank of Philadelphia indicated nearly 30 percent of manufacturers saw business activity increase through Oct. 16, outpacing the 23 percent reporting a decline.
But Michael Trebing, an economic analyst for the bank, said “the fact that orders and shipments have not changed much suggest things are still somewhat flat.”
With those underlying indicators in neutral territory, firms backpedaled on their future outlook for business activity through April 2013, as a greater share of manufacturers reported they expect declines over the next six months compared to September's readings.
“The amount of uncertainty for the future indicated (by the manufacturers) is not too surprising,” Trebing said. “We got lots of comments this month about concerns with the election, the fiscal cliff and the international outlook, considering many firms produce goods for export markets.”
Trebing said uncertainty has been “eating into hiring,” since “some firms that had been hiring in previous months have stopped, because they're waiting for demand to pick up.”
But according to the survey, the number of manufacturing firms planning to improve their headcount over the next six months surpassed those expecting to lay off workers in the same period.
However, only 32 percent firms said they added workers over the past year, which barely outnumbered the 31 percent that downsized. In addition, 28 percent of firms indicated increasing their share of temporary or agency workers since last October.
The state Department of Labor and Workforce Development today reported New Jersey's manufacturing sector added 900 jobs in September — its first monthly employment increase since October 2011.