Orders up, job growth stays flat

April 18, 1994|By John E. Woodruff | John E. Woodruff,Sun Staff Writer

Factory orders, shipments and backlogs all grew again last month in five mid-Atlantic states, but employment remained flat even though workers were putting in longer hours, the Federal Reserve Bank of Richmond said yesterday.

Based on responses from 123 manufacturers in Maryland, North Carolina, South Carolina, Virginia and West Virginia, the Richmond Fed said most firms expect both trends -- more factory activity but flat employment -- to continue for at least the next six months.

"This is consistent with the longer-term trend in this region," said Michael A. Conte, director of regional economic studies at the University of Baltimore.

"Manufacturing production in Maryland has actually been growing slightly, at about 1 percent a year, but productivity is increasing even faster, so that companies can make just as many goods or more even while steadily reducing their work forces," he said.

That trend is in addition to continuing losses of manufacturing plants to other states and the decline of the defense business that has long been a mainstay of factory employment here, he said.

The Richmond Fed survey showed that 48 percent of the companies expected to be producing more goods six months from now but that only 24 percent expected to have more employees.

Some 55 percent expected the number of workers to be the same as it is now and 21 percent expected to have fewer.

Prices manufacturers pay for raw materials went up less than the 2.5-percent annual national rate of inflation, and prices they charge for finished goods were almost unchanged, the companies reported in the survey.

The Fed also said it will increase the frequency of its manufacturing survey to once a month rather than every six weeks.

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