Increase in Index Points to Manufacturing Recovery

Manufacturers in Orange County reported slight production increases during the second quarter, leading economists at Chapman University to boost an economic confidence indicator to its highest level in two years.

The private university’s quarterly Purchasing Managers Index rose to a level of 51.5 from 47.6 in the first quarter.

While not enough to prompt a prediction that the economic slump has ended, the increase does indicate that the manufacturing segment of the county’s economy “has stopped its decline and may be on a recovery course during the rest of the year,” said Raymond Sfeir, the Chapman economist who prepares the report.

A measurement above 50 on the index indicates growth in the manufacturing sector while a level below 50 indicates shrinkage.

While the index also hit 51.5 in the third quarter of 1991, the last time it was higher was in the second quarter of 1990, when it measured 57.5.

An independently produced national purchasing managers index hit 53.5 in the second quarter, up from a first-quarter level of 51.3, indicating a slightly stronger recovery in most other parts of the country.

Sfeir said computer, electronics and transportation manufacturers in Orange County bucked the slight upward trend and showed signs of a continuing slump.