Philadelphia Manufacturing: No Overall Growth

Federal Reserve survey indicates steady pace for manufacturing activity, with some growth in new orders, shipments and employment.

October manufacturing activity for the Philadelphia area maintained a steady pace, according to firms polled by the Federal Reserve Bank of Philadelphia in its Business Outlook Survey.

While the index for general activity was slightly negative in October, there was some indication of growth in new orders, shipments, and employment.

Manufacturing executives in the area showed more optimism about future activity, with most indicators rebounding from their six-year lows in September.

The diffusion index of current activity, an indicator of manufacturing conditions, was slightly lower, from -0.4 in September to -0.7 in October. Of the firms surveyed, twenty-two percent reported increased activity this month, although 23 percent reported a decrease in activity.

The new orders and shipments indexes were up from their slightly negative readings in September — the new orders index increased 15 points, while the shipments index increased 12 points. However, both the delivery time and unfilled orders indexes fell continuing their negative showings for two consecutive months.

Employment figures indicated only moderate growth in October. The current employment index fell to one point from September and remains at a relatively low level. Twenty-two percent of the firms reported increases in employment, and 13 percent reported reductions.

For final manufactured goods, twenty-two percent of the firms reported paying higher prices in October, down slightly from 27 percent in September.

The future general activity index increased from -0.2 to 16.7; while the indexes for future new orders and shipments both rose about 20 points. The future employment index increased seven points.

The manufacturers surveyed said finding qualified workers and the cost of benefits were the most critical problems they were facing. The categories that were higher than when the question was asked last year were finding qualified workers, benefit costs, and low demand for products.


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