March 2023 Manufacturing Business Outlook Survey


March 2023 Manufacturing Business Outlook Survey

Note: Survey responses were collected March 6-13.

Manufacturing activity in the region as a whole continued to decline, according to firms responding to the March reports Manufacturing Business Outlook Survey. The survey’s overall indicators of current activity were all negative. On balance, companies also recorded a decline in employment. Most forward-looking indicators weakened, suggesting that companies continue to have muted growth expectations for the next six months.

Current indicators are weakening

The Diffusion Index for current general activity remained negative but increased by 1 point to -23.2, the seventh consecutive negative reading (see Figure 1). More than 34 percent of firms reported activity declines, while 11 percent reported increases; the majority (53 percent) reported no change. New order and shipment indicators have both fallen to their lowest levels since May 2020: the shipment index fell sharply from 8.7 last month to -25.4 this month, and the new order index fell 15 points – 28.2. Over 35 percent of companies reported a decrease in new orders (unchanged from the previous month), while 7 percent reported an increase (vs. 22 percent); 58 percent reported no change (vs. 41 percent).

On balance, companies reported a decline in employment. The employment index fell to -10.3 from 5.1, the index’s second negative reading since June 2020 and the lowest reading since May 2020. Over 73 percent of companies reported stable employment levels (up from 61 percent last month), 16 percent reported a decrease in employment (down from 15 percent) and 6 percent reported increased employment (down from 21 percent). The average working week index fell from -3.2 to -22.0.

Chart 1. Current and future general activity indices

Price indices remain close to the long-term average

Businesses continued to report general price increases, but indices of prices paid and received fell. The index of current prices paid fell 3 points to 23.5, its lowest level since August 2020 and close to its long-term average (see Figure 2). Nearly 35 percent of companies reported increases in input prices, while 11 percent reported decreases; 53 percent of the companies reported no change. The index of received current prices fell 7 points to 7.9, the lowest level since June 2020. About 23 percent of companies reported an increase in received prices for their own goods this month, while 15 percent reported a decrease; 62 percent indicated no change.

Chart 2. Current Indices for Prices Paid and Received

Companies report higher production, little change in capacity utilization

This month’s special questions asked companies to estimate their overall production growth for the first quarter ending this month compared to the fourth quarter of 2022. A higher proportion of companies reported an increase in production (46 percent) versus stocks reporting a decrease (32 percent). Regarding the capacity utilization of the companies for the current quarter and a year ago, the median of the current capacity utilization of the responding companies remained unchanged at 70 to 80 percent. Although most companies identified labor supply and supply chains as mild or moderate constraints on capacity utilization, 27 percent identified labor as a major constraint and 12 percent identified supply chains as a major constraint. Looking ahead to the next three months, most companies expect the impact of various factors to remain the same; However, 23 percent of companies expect the impact on financial capital to worsen, down slightly from 26 percent when asked the question in December.

Future indicators are softening

The diffusion index for future general activity declined for the second straight month, falling 10 points to -8.0 (see Figure 1). The proportion of companies expecting activity to decrease (29 percent) exceeded those expecting an increase (21 percent); 45 percent expect no change. The Future New Orders Index was down 5 points but remained positive at 4.6, while the Future Shipment Index rose to 7.8 from 4.6. On balance, companies still expected employment gains over the next six months, but the Future Employment Index fell 1 point to 6.9. Although the index of futures prices paid rose 9 points to 26.8, both futures price indices were below their long-term averages. The future investment index fell to -3.8 from 7.5, the index’s first negative reading since September 2009.


Reactions to March Manufacturing Business Outlook Survey point to continued declines in the region’s manufacturing sector. The survey’s indicators of general activity, new orders and shipments were all negative and firms reported a net fall in employment. The survey’s overall indicators of future activity continue to point to subdued growth expectations over the next six months.

Special Questions (March 2023)

1. How does your company’s overall production compare in Q1 2023 to Q4 2022?

An increase of: % of companies subtotals
10% or more 7.3 % of companies reporting an increase: 46.3
5-10% 19.5
0-5% 19.5
No change 22.0
A drop from:
0-5% 7.3 % of companies reporting a decrease: 31.7
5-10% 12.2
10% or more 12.2

2. Which of the following statements best describes the percentage of capacity utilization of your plant currently (2023:Q1) and a year ago (2022:Q1)?

capacity utilization rate 2023:Q1
% the reporter
% the reporter
Less than 30% 0.0 4.9
30-40% 7.3 2.4
40-50% 2.4 2.4
50-60% 7.3 7.3
60-70% 24.4 19.5
70-80% 31.7 29.3
80-90% 14.6 19.5
90-100% 12.2 14.6
Average usage rate 70-80 70-80

3. To what extent have the following factors limited capacity utilization in the current quarter?

Not at all

In moderation
COVID-19 mitigation measures 85.4 12.2 2.4 0.0
energy markets 75.6 19.5 2.4 2.4
financial capital 80.5 7.3 4.9 7.3

job offer

26.8 14.6 31.7 26.8
supply chains 29.3 26.8 31.7 12.2
other factors 63.6 4.5 13.6 18.2

4. How do you think the impact of the following factors as capacity utilization constraints will change over the next three months?


Stay the same


COVID-19 mitigation measures 0.0 89.5 10.5
energy markets 7.9 76.3 15.8

financial capital

23.1 74.4 2.6

job offer

7.5 65.0 27.5
supply chains 2.6 56.4 41.0
other factors 0.0 87.0 13.0

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