ORANGE, CA — Based on a survey of purchasing managers, the California Composite
Index, measuring overall manufacturing activity in the state, decreased from 67.3 in the fourth
quarter of 2021 to 63.8 in the first quarter of 2022, indicating that the manufacturing sector is
expected to grow at a slower rate in the first quarter of this year. “The purchasing managers
report that supply chain issues and higher input costs are negatively affecting the growth rate
of the California manufacturing sector in the first quarter of 2022,” said Dr. Raymond Sfeir,
director of the purchasing managers’ survey. Expressing their frustration, one purchasing
manager wrote “The port congestion is terrible, and pricing is at a point of being criminal”.
Production, new orders, and employment are expected to grow at a lower rate in the first
quarter. Inventories of purchased materials are expected to increase at a higher rate. Lead
time to receive raw materials is reaching six months in some industries. It is very difficult to
find qualified workers. Outsourcing costs are increasing as well. Cancelled orders are not
uncommon.
