O.C. Manufacturing Beats National Average

Rebounding from a sluggish second quarter, manufacturing in Orange County has roared back and eclipsed the national average, with production, new orders and inventories of purchased materials all increasing, according to a Chapman University survey.

But in a potentially ominous development, commodity prices jumped for the second consecutive quarter, indicating that inflationary pressures might be building. That could translate into higher consumer prices in the future.

The university’s quarterly manufacturing index, which tracks the industry’s expansion and shrinkage, grew by 11% in the last three months, after dropping 13.4% in the second quarter.

“The local economy as a whole is doing well, except in high-tech,” said Chapman economist Raymond Sfeir.

Several sectors performed well, according to the survey of purchasing managers. Nondurable goods, which include such items as clothing, paper and canned and frozen foods, outpaced all other groups for the second consecutive quarter.

The index for the third quarter jumped to 56.4, compared with 50.7 in the second quarter and 55 in the third quarter last year.

Nationally, the manufacturing index inched up to 55.1 in the last three months, from 55 in the second quarter.