For a second consecutive month, the overall index for the Mountain States region, Colorado, Utah and Wyoming, moved above growth neutral 50 to 55.4 for November from October’s 51.6.
The November employment index increased to 49.9 from 46.1 in October.
In Colorado, the leading economic indicator also rose above 50 for the second consecutive month.
Based upon a survey of supply managers in the state, the index climbed to 70.3 from 65.5 during October.
Components of the overall index for November were new orders at 68.9, production or sales at 65.7, delivery lead time at 65.4, inventories at 73.7, and employment at 77.7.
Colorado has lost 10.4 percent of its manufacturing jobs, or almost 15,000 of its manufacturing base during the past year.
“A weaker U.S. dollar, making Colorado goods cheaper abroad, and a rebounding global economy will underpin the state’s economy in the months ahead,” said Goss Institute for Economic Research Director Dr. Ernie Goss today.
Exports will be especially important for the state’s computer and electronic component manufacturing sector.
Goss expects the state to add jobs, “albeit at a snail’s pace,” in the first quarter of 2010.
The global economic recession has caused the loss of almost 27,000 manufacturing jobs, for a 9.7 percent reduction for the three-state region.
But the pace of job losses will diminish significantly in the months ahead.
Goss expects job losses in the region to cease in the first quarter of 2010.
“Over 44 percent of supply managers anticipate that layoffs lie ahead for their company. As a result of the weak labor market, only 56 percent of the supply managers expect to receive a pay increase in 2010,” Goss said. “While new orders and sales have been growing and are likely to continue to expand, that growth is likely to be volatile by historical standards with marginal improvements in the region’s job market.”
And for the seventh time in the past eight months, the regional inflation gauge rose above growth neutral. The inflation gauge, which tracks the cost of raw materials and supplies, climbed to 57.4 from 56.3 in October. “By historical standards, the prices-paid index indicates only modest upturns in inflationary pressures in the region, even with a weak dollar and record low Federal Reserve (Fed) interest rates pushing prices higher,” Goss said.
Supply managers in the three-state region added to inventories during November, providing another measure of economic confidence. The November inventory index rose to 52.7 from October’s 47.1.
Less than 10 percent of supply managers reported cuts in inventory levels for November–after 13 consecutive months of cutting inventory.
Other components of the November Business Conditions Index were new orders at 63.9, up from October’s 61.7; production or sales at 58.9, up from 53.2; and delivery lead time at 51.9, up from 49.9.
The Goss Institute conducts the monthly survey of Supply Management Institutes in the Mountain States region for The Creighton Economic Forecasting Group.