South Jersey manufacturers hoping to quickly ride out Sandy-related downturn
Though Hurricane Sandy threw a wrench in business activity at South Jersey manufacturing firms in late October and early November, an economist said firms expect the recovery efforts to drive new orders and shipments — and get them back on the positive track they briefly observed before the storm hit.
"Though business activity finally reached positive readings in October, it moved back into negative territory this month, as the impact of Sandy had significant effects on activity, since many firms lingered for some time after the storm," said Michael Trebing, an economic analyst for the Federal Reserve Bank of Philadelphia, which released its monthly Business Outlook survey today. "But even firms in New Jersey that had a longer period of disruption from the storm are optimistic about the recovery making up for that lost production, since there's not a whole lot of evidence about the storm negatively affecting their overall future outlook."
Nearly 32 percent of the manufacturers surveyed saw declines in business activity through Nov. 13 — a jump from 23 percent of firms reporting a decrease in October.
While manufacturers' production activity was shut down or severely crippled for an average of 1.3 days as a result of the superstorm, "at the top of the list of reasons why was the inability of their workers to get to their plants, and very few firms indicated major losses in capital or equipment," Trebing said.
Regardless of Sandy's impact on the manufacturing sector, Trebing said he anticipated a deceleration in business activity in November, since nearly half the firms indicated in September that they expect plant production to slow down in the final three months of the year.
Looking forward, 18 percent of the manufacturers surveyed expect to lay off workers through May 2013 — a slight bump from 14 percent indicating those plans last month. Twenty-two percent of firms anticipate expanding their work force over the next six months, unchanged from the October survey results.
In September, New Jersey's manufacturing sector saw its first monthly employment increase since October 2011, according to the state Department of Labor and Workforce Development.