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SOUTHEASTERN MANUFACTURERS REPORT UPTURN IN PRODUCTION, SEE MORE GAINS ON HORIZON

 ATLANTA, Nov. 15 /PRNewswire/ -- The percentage of Southeastern manufacturing firms reporting production increases in October rose markedly from September's figure, according to the Federal Reserve Bank of Atlanta's monthly survey of regional manufacturing conditions.
 In October, 43 percent of plants responding to the survey reported gains in output, compared with 30 percent in September. In addition, positive responses for shipments rose.
 The diffusion index for production was 29.7 in October, up significantly from September's revised 7.1. (The diffusion index is calculated as the percent of plants reporting increases minus the percent reporting declines.)
 Expectations for future activity became more positive in October. For production, 59 percent of responding manufacturers expected to increase their production in six months, compared with 47 percent in September. Moreover, the share expecting lower output at their plants in coming months edged down. The percent of respondents foreseeing a rebound in shipments and new orders increased to over 60 percent from approximately 50 percent in September.
 Participating Southeastern manufacturers also expect that business activity in their industry nationwide will improve in the next six months. Of responding manufacturers in October, 60 percent anticipated gains, up from 45 percent the month earlier. The diffusion index for this category rose to 51 in October from 30 in September.
 Employment conditions were essentially unchanged in October, with 60 percent of responding manufacturers reporting no change in the number of workers at their plants. Those expecting to add to their payrolls are now outnumbering those planning layoffs by 10 percentage points.
 While 57 percent of respondents in the October report expected no change in prices of their products in the next six months, 39 percent anticipated price increases for their finished products. This latter measure has increased from 32 percent in September and 22 percent in August.
 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.
 October 1993(1)
 SUMMARY OF SOUTHEASTERN MANUFACTURING CONDITIONS(2)
 Oct. vs. Sept. Diffusion
 (percent)(a) Index(3)
 SOUTHEASTERN PLANT INDICATORS Decr. No Chg. Incr.
 Production 13.3 43.8 43.0 29.7
 Volume of shipments 18.9 41.7 39.4 20.5
 Volume of new orders 17.8 45.7 36.4 18.6
 Backlog of orders 26.0 55.1 18.9 (7.1)
 Inventories:
 Materials 19.8 65.1 15.1 (4.7)
 Plants' finished goods 22.6 59.7 17.7 (4.9)
 Number of employees 17.8 59.7 22.5 4.7
 Average employee workweek 14.0 70.5 15.5 1.5
 Prices received for finished product 13.3 76.6 10.2 (3.1)
 Prices paid for raw materials 7.9 73.2 18.9 11.0
 Volume of new orders for exports 7.8 80.6 11.7 3.9
 Supplier delivery time(b) 6.6 88.4 5.0 1.6
 INDUSTRY BUSINESS ACTIVITY, NATIONAL 21.9 48.4 29.7 7.8
 Six mos. from Oct. Diffusion
 (percent)(a) Index(3)
 SOUTHEASTERN PLANT INDICATORS Decr. No Chg. Incr.
 Production 8.5 32.6 58.9 50.4
 Volume of shipments 8.6 27.3 64.1 55.5
 Volume of new orders 4.7 33.6 61.7 57.0
 Backlog of orders 16.8 46.4 36.8 20.0
 Inventories:
 Materials 23.2 60.8 16.0 (7.2)
 Plants' finished goods 23.6 59.3 17.1 (6.5)
 Number of employees 19.4 51.2 29.5 10.1
 Average employee workweek 10.2 73.4 16.4 6.2
 Prices received for finished product 4.7 56.7 38.6 33.9
 Prices paid for raw materials 4.8 56.0 39.2 34.4
 Capital expenditures 12.4 48.8 38.8 26.4
 Volume of new orders for exports 4.7 64.5 30.8 26.1
 Supplier delivery time(b) 5.0 83.2 11.8 (6.8)
 INDUSTRY BUSINESS ACTIVITY, NATIONAL 8.7 31.5 59.8 51.1
 (1) October and Revised September tables are available on the U.S. Department of Commerce Bulletin Board.
 (2) Data from 129 respondents. Respondents are requested to take into account normal seasonal fluctuations.
 (3) The diffusion index is calculated as the percentage of total respondents reporting increases minus the percentage reporting declines.
 (a) Figures may not sum exactly to 100 because of rounding.
 (b) 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- 11/15/93
 /CONTACT: Bobbie McCrackin of the Federal Reserve Bank of Atlanta, 404-521-8934/


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

BN-RA -- AT004 -- 4293 11/15/93 10:01 EST
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Date:Nov 15, 1993
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