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SOUTHEASTERN MANUFACTURERS IN JUNE: PRODUCTION UP BUT OUTLOOK WEAKER

 ATLANTA, July 13 /PRNewswire/ -- The percentage of southeastern manufacturing firms that reported production increases in June was above May's figure, according to the Federal Reserve Bank of Atlanta's monthly survey of regional manufacturing conditions.
 In June, 38 percent of plants responding to the survey reported gains in output compared with 32 percent in May. This was the first increase in five months. The percentage of plants reporting increases in new orders also rose for the first time in five months, while the share reporting increases in shipments rose for the first time in four months.
 However, national business activity in June, as viewed by southeastern plants, continued to be weaker than the region's, with only 21 percent reporting increased national activity.
 For current conditions, the diffusion index for production was 21 in June, up from May's revised 11. (The diffusion index is calculated as the percent of plants reporting increases minus the percent reporting declines.)
 At the same time, expectations for increased production continued the steady decline begun last January. In June, 39 percent of the surveyed manufacturers expected to increase their production in six months, compared with 48 percent in May and the recent high of 72 percent reported in December.
 Most plants continued to report no change in employment conditions. Looking ahead, 15 percent of responding plants expect employment growth in six months, which is below May's 21 percent. This share remains well below the recent high of 41 percent recorded in the November 1992 survey.
 Prices for finished products and raw materials were unchanged in June at three-fourths of responding plants. Those expecting no price change for their finished goods in the next six months rose to 72 percent in June from 68 percent in May.
 It should be noted that in many categories the percentage share reporting no change in current activity or expectations is often large and this month is no exception.
 The Federal Reserve Bank of Atlanta Survey of Southeastern Manufacturing Conditions for June is based on responses from 115 manufacturing plants throughout the Sixth Federal Reserve District, which includes the states of Alabama, Florida, and Georgia, along with portions of Louisiana, Mississippi, and Tennessee. These plants represent a cross-section of industries in the region.
 June 1993(a)
 SUMMARY OF SOUTHEASTERN MANUFACTURING CONDITIONS(b)
 June vs. May (pct.)(d) Diff.(c)
 SOUTHEASTERN PLANT INDICATORS Decr. No Chg. Incr. Index
 Production 16.7 45.6 37.7 21.0
 Volume of shipments 23.7 39.5 36.8 13.1
 Volume of new orders 29.8 36.8 33.3 3.5
 Backlog of orders 31.0 51.3 17.7 (13.3)
 Inventories:
 Materials 25.7 54.0 20.4 (5.3)
 Plants' finished goods 32.1 46.4 21.4 (10.7)
 Number of employees 16.8 67.3 15.9 (0.9)
 Average employee workweek 12.2 70.4 17.4 5.2
 Prices received for finished product 13.4 75.9 10.7 (2.7)
 Prices paid for raw materials 6.3 76.8 17.0 10.7
 Volume of new orders for exports 10.2 71.6 18.2 8.0
 Supplier delivery time(e) 2.8 94.4 2.8 0.0
 INDUSTRY BUSINESS ACTIVITY, NATIONAL 24.8 54.0 21.2 (3.6)
 6 mos. from June (pct.)(d)Diff.(c)
 SOUTHEASTERN PLANT INDICATORS Decr. No Chg. Incr. Index
 Production 23.9 37.2 38.9 15.0
 Volume of shipments 25.7 32.7 41.6 15.9
 Volume of new orders 22.1 39.8 38.1 16.0
 Backlog of orders 27.9 48.6 23.4 (4.5)
 Inventories:
 Materials 35.2 50.0 14.8 (20.4)
 Plants' finished goods 34.5 50.0 15.5 (19.0)
 Number of employees 27.9 56.8 15.3 (12.6)
 Average employee workweek 20.5 67.0 12.5 (8.0)
 Prices received for finished product 7.2 72.1 20.7 13.5
 Prices paid for raw materials 4.5 63.6 31.8 27.3
 Capital expenditures 15.4 52.9 31.7 16.3
 Volume of new orders for exports 6.3 65.6 28.1 21.8
 Supplier delivery time(e) 2.9 85.7 11.4 (8.5)
 INDUSTRY BUSINESS ACTIVITY, NATIONAL 27.0 32.4 40.5 13.5
 (a) June and Revised May tables are available on the U.S. Department of Commerce Bulletin Board.
 (b) Data from 115 respondents. Normal seasonal fluctuations are taken into account by respondents.
 (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- 7/13/93
 /CONTACT: Tony Heffernan of the Federal Reserve Bank of Atlanta, 404-521-8748/


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

BR-BN -- AT002 -- 0794 07/13/93 10:04 EDT
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