Inland Empire’s Manufacturing Sector Recovers from a Feb Low: Will it Sustain?

By: Sharjeel Sohaib


Apr 14, 2023


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  • Inland Empire’s manufacturing sector is back on solid ground, as the Institute of Applied Research and Policy Analysis at Cal State San Bernardino reported.
  • The purchasing managers index rose to 59.2 in March, significantly improving from February’s 50.8. The increase is due to the growth in production and new orders, with employment and commodity prices also showing positive trends.
  • The purchasing managers remain pessimistic about the Inland economy’s immediate future, with only 4% expecting it to improve in the next three months

The Inland Empire’s manufacturing sector, which has been reeling from the effects of the pandemic, is showing signs of bouncing back. According to a recent report by the Institute of Applied Research and Policy Analysis at Cal State San Bernardino, the region’s purchasing managers index rose to 59.2 in March, up from 50.8 in February. This marks the third consecutive month that the index has been at 50 or higher, indicating that Inland manufacturing is growing again.

Rising Production and New Orders

The report highlights the two primary components of the index: production and new orders. Production rose from 50 in February to 65.4 in March, while new orders significantly jumped from 48 to 65.4 during the same period. This is the first time in several months that the index has increased above the baseline 50, indicating that new orders may improve.

Positive Employment and Commodity Prices

Employment also saw a positive trend, with the index rising from 58 in February to 59.6 in March. The Inland commodity price index, a concern due to increasing inflation, also eased slightly from 70 to 61.5. These positive indicators suggest that the region’s economy may be on the road to recovery.

Pessimistic Outlook Despite Positive Indicators

Despite the positive indicators, the region’s purchasing managers remained pessimistic about the immediate future of the Inland economy. Only four percent said they expect the local economy to improve in the next three months, 46 percent said they hope it will weaken, and 50 percent predicted it would stay the same.

Importance of Manufacturing Index in Economic Recovery

The Inland Empire’s manufacturing sector is crucial to the region’s economy. It is the second-largest manufacturing hub in California, employing over 325,000 workers and generating billions of dollars in economic activity. The purchasing managers index is a crucial indicator of the sector’s health and ability to contribute to economic recovery.

As the pandemic continues to impact the global economy, the importance of the manufacturing sector in driving economic growth cannot be overstated. Manufacturing is a critical component of many supply chains and industries, and a strong manufacturing sector can lead to job creation, increased productivity, and higher economic output.

What does it take to Sustain the Manufacturing Index?

The recent improvement in the Inland Empire’s manufacturing sector is a positive sign for the region’s economic recovery. However, to sustain this level of growth, several factors need to be considered, both at the local and national levels.

At the local level, the Inland Empire must continue investing in its manufacturing infrastructure. This includes upgrading its transportation and logistics networks, investing in research and development, and providing training and education programs to the workforce. Additionally, local policymakers must provide a stable and supportive business environment, with policies encouraging investment and innovation.

What about the Feds Policy?

Fiscal policy levers, such as interest rates, significantly impact the manufacturing sector.

When Fed increases the interest rates, which is what has happened in the last few months, borrowing becomes more expensive, which can lead to a slowdown in manufacturing activity. Higher interest rates also increase the cost of doing business, making it more challenging for manufacturers to invest in new equipment and technologies or to hire additional workers.

Therefore, the Federal Reserve’s monetary policy decisions can significantly impact the manufacturing sector, and policymakers must carefully consider the potential impacts of any interest rate changes on the industry’s growth and stability.


In conclusion, the recent uptick in the Inland Empire’s manufacturing sector is a promising sign for the region’s economic recovery. While uncertainty about the immediate future is still uncertain, the positive indicators suggest that the industry is moving in the right direction. As the recent banking crisis triggered by SVB’s failure continues to impact the global economy, a strong manufacturing sector will be essential in driving economic growth and recovery.

We’ll continue reporting how the region responds to rising interest rates and how well it sustains a higher manufacturing index.


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