Above: Dr. Barbara Sirotnik, Director of the Institute of Applied Research and Robert Lovingood, District Supervisor
This month’s Inland Empire Purchasing Managers’ Index (PMI) recorded a huge drop from 57.0 in February to 43.3 in March.
The data reflected the most precipitous drop in this economic measure since December 2015, when the index plunged to 42.1 from the previous month’s 52.3, according to information provided by first District Supervisor Robert Lovingood (based on an assessment by economic experts Dr. Barbara Sirotnik, Director of the Institute of Applied Research and Project Coordinator Lori Aldana).
The Purchasing Managers’ Index (PMI) provides an indication of the prevailing direction of economic trends in the manufacturing and service sectors. It analyzes whether market conditions—as viewed by purchasing managers—are expanding, staying the same, or contracting.
The purpose of the PMI is to provide information about current and future business conditions to company decision makers, analysts, and investors.
“This month’s low figure is not surprising to any of us, considering the pandemic ravaging the world. Non-essential businesses are shuttered and residents in most states are ordered to stay home,” Sirotnik said. “Some people are able to work from home and are continuing to get a paycheck.” According to Sirotnik these individuals will continue to buy based on an assumption, the products can be delivered.
However, the rest of his assessment was less optimistic. “Others have been laid off and are barely holding on, waiting for the federal government to issue the checks that have been promised in the recently passed two-trillion-dollar coronavirus stimulus bill.”
He further acknowledged how some people are wondering how they will get by as their sick and vacation pay is being used up; and for those who have consistently lived ‘paycheck to paycheck—most now find themselves with no paycheck at all.
The Purchasing Managers’ Index not only tracks economic trends in the manufacturing sector, it also summarizes the advance or decline in business; and is generally used by companies to help plan their annual budgets, manage staffing levels, and estimate cash flow.