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SOUTHEASTERN MANUFACTURERS IN DECEMBER: OPTIMISM FOR OUTLOOK RISES, PRODUCTION REMAINS STEADY

 ATLANTA, Jan. 12 /PRNewswire/ -- Southeastern manufacturing firms in December reported further gains in expectations for future activity, according to the Federal Reserve Bank of Atlanta's monthly survey of regional manufacturers.
 This report on expectations comes on the heels of strong gains in current conditions reported in October and sustained in November and December. Looking six months ahead, manufacturers increasingly expect improvement -- not only for production, shipments, and new orders but also in employment.
 Expectations for future activity continued to rise in December. Of responding manufacturers, 67% expected to increase their production in six months, compared with 60% in November. Expectations for increased new orders and shipments in six months were also robust.
 Employment expectations have also improved. For six months out, 34% say they plan to hire more workers while 17% plan reductions. The diffusion index for this category has been positive since August 1993 and has been gradually strengthening over the past three months. For December, those adding to their payrolls outnumbered those with layoffs -- 18% to 11%.
 Participating southeastern manufacturers also anticipate that national business activity in their industries will improve in the next six months. In December, 69% anticipated gains, up from 63% in November and the highest since January 1993.
 For current conditions, reports on production and shipments in December were slightly positive on net. The diffusion index for production was 4.5 in December, down slightly from November's revised 7.8. (The diffusion index is calculated as the percentage of plants reporting increases minus the percentage reporting declines.) Current new orders were unchanged, with a moderately positive diffusion index, and were stronger than production and shipments.
 The outlook for prices received for finished products remained steady with a little over half seeing no change, but those expecting higher prices outnumbered respondents expecting lower prices, 41% to 6%.
 The Atlanta Fed's survey covers the Sixth Federal Reserve District, which includes Alabama, Florida, and Georgia, and portions of Louisiana, Mississippi, and Tennessee. The plants surveyed represent a cross- section of industries in the region.
 December 1993(a)
 SUMMARY OF SOUTHEASTERN MANUFACTURING CONDITIONS(b)
 Dec. vs. Nov.(pct.)(d) Diff.(c)
 SOUTHEASTERN PLANT INDICATORS Decr. No Chg. Incr. Index
 Production 27.4 40.7 31.9 4.5
 Volume of shipments 27.4 39.8 32.7 5.3
 Volume of new orders 23.9 38.1 38.1 14.2
 Backlog of orders 27.4 46.0 26.5 (0.9)
 Inventories:
 Materials 26.4 59.1 14.5 (11.9)
 Plants' finished goods 23.9 52.3 23.9 0.0
 Number of employees 10.8 71.2 18.0 7.2
 Average employee workweek 16.1 68.8 15.2 (0.9)
 Prices received for finished product 8.9 78.6 12.5 3.6
 Prices paid for raw materials 7.3 76.1 16.5 9.2
 Volume of new orders for exports 7.8 73.3 18.9 11.1
 Supplier delivery time(e) 8.5 87.7 3.8 4.7
 INDUSTRY BUSINESS ACTIVITY, NATIONAL 18.6 48.7 32.7 14.1
 6 mos. from Dec. (pct.)(d)Diff.(c)
 SOUTHEASTERN PLANT INDICATORS Decr. No Chg. Incr. Index
 Production 8.0 25.0 67.0 59.0
 Volume of shipments 9.8 20.5 69.6 59.8
 Volume of new orders 7.1 29.2 63.7 56.6
 Backlog of orders 15.9 42.5 41.6 25.7
 Inventories:
 Materials 26.9 56.5 16.7 (10.2)
 Plants' finished goods 25.9 50.9 23.1 (2.8)
 Number of employees 17.4 48.6 33.9 16.5
 Average employee workweek 8.9 69.6 21.4 12.5
 Prices received for finished product 6.3 52.3 41.4 35.1
 Prices paid for raw materials 10.0 44.5 45.5 35.5
 Capital expenditures 18.3 41.3 40.4 22.1
 Volume of new orders for exports 5.3 69.1 25.5 20.2
 Supplier delivery time(e) 5.7 85.7 8.6 (2.9)
 INDUSTRY BUSINESS ACTIVITY, NATIONAL 8.0 23.2 68.8 60.8
 (a) December and Revised November tables are available on the U.S. Department of Commerce Bulletin Board.
 (b) Data from 114 respondents. Respondents are requested to take into account normal seasonal fluctuations.
 (c) The diffusion index is calculated as the percentage of total respondents reporting increases minus the percentage reporting declines.
 (d) Figures may not sum exactly to 100 because of rounding.
 (e) Decrease equals slower; increase equals faster.
 NOTE: For background on the Survey of Southeastern Manufacturing Conditions, see the article by R. Mark Rogers, "Tracking Manufacturing: The Survey of Southeastern Manufacturing Conditions" in the September/October 1992 issue of the Federal Reserve Bank of Atlanta's Economic Review.
 -0- 1/12/94
 /CONTACT: Keenan Conigland of the Federal Reserve Bank of Atlanta, 404-521-8748/


CO: Federal Reserve Bank of Atlanta ST: Georgia IN: FIN SU:

BR-JS -- AT006 -- 1328 01/12/94 10:04 EST
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