O.C. Factory Activity Falls in 2nd Quarter
Orange County’s manufacturing slump continued in the second quarter, but there are signs a recovery may be around the corner, according to a new university survey released Tuesday.
Factories in the county, dragged down by the high-tech sector, saw further drops in new orders, employment and supplier deliveries in the second quarter, according to Chapman University’s quarterly survey. But the pace of decline was slower than earlier this year.
Chapman’s index measuring Orange County’s overall manufacturing activity was 45.8 in the April-June period, compared with 43.3 for the nation. A reading of below 50 means that manufacturing activity is contracting.
Still, Chapman economist Raymond Sfeir said the latest index for Orange County was an improvement from the 43.7 figure in the first quarter. Sfeir predicted that Orange County’s manufacturing activity will decline further in the third quarter, but not as severely as earlier this year.
“We have turned the corner,” he said, predicting that manufacturing in Orange County should be expanding again in early 2002.
If that were to happen, it would restore growth to a sector that had been doing well until this year. Even with this year’s decline, factory payrolls in Orange County are still up about 1% from a year ago, the latest state figures show. That contrasts with sharp declines in national manufacturing employment.
More than 230,000 people work for Orange County manufacturing employers, or about one of every six payroll workers in the county.
Chapman’s second-quarter survey showed no signs of improvement in Orange County’s high-tech industries, including computer equipment and electronics makers. But production and new orders--two components of Chapman’s overall index--increased among surgical and medical equipment manufacturers. Production also picked up at aerospace firms, food processors and fabricated metal makers.
Overall, factories in the county reported a further drop in new orders, but the pace of decline slowed from earlier this year. Factory inventories also saw further reductions in the second quarter.
