A. Gary Anderson Center for Economic ResearcH Based on a survey of purchasing managers, the California Composite Index, measuring overall manufacturing activity in the state, increased from 53.7 in the fourth quarter of 2023 to 55.0 in the first quarter of 2024, indicating that the manufacturing sector is expected to grow at a higher rate in the first quarter of 2024. “Purchasing managers are upbeat about 2024. They see supply chain improvement, moderating raw materials price increases, and positive impact from expected lower interest rates. At the same time, they are concerned about this election year, see shortages of some raw materials, and fret over California’s minimum wage increases,” said Dr. Raymond Sfeir, director of the purchasing managers’ survey. Production and new orders are expected to grow at a higher rate in the first quarter, while commodity prices are expected to rise at practically the same rate as at the end of 2023. The inventory of purchased materials is expected to decrease. The non-durable goods industries are expected to underperform the other manufacturing industries, while the durable goods industries other than high-tech will recuperate from the zero growth in the fourth quarter of 2023. |
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