Manufacturing activity in the mid-Atlantic region cooled slightly in December, though sentiment surrounding manufacturing employment took a turn for the better.
The Federal Reserve Bank of Philadelphia said in its monthly Business Outlook Survey that its manufacturing index fell to -4.3 this month from 5.1 in November. This month, 20 percent of the firms reported increased activity, while 25 percent reported decreased activity. The new orders index improved by just one point, and remains in negative territory for the second straight month.
The shipments index moved 13 points higher than in November, to 19 from 6.5.
Meanwhile, the percentage of firms reporting an increase in employment (27 percent) was somewhat higher than that of firms reporting a decrease (19 percent), and the current employment index rose eight points from its November reading.
The average workweek index edged slightly lower: 20 percent of the firms reported fewer hours, and 18 percent reported increased hours.
Price pressures continue to weigh on the region's manufacturers, but the increases were not as widespread as in previous surveys. The prices paid index has now fallen for five consecutive months. Thirty-one percent of the firms reported higher input prices this month; 10 percent reported lower input prices. The prices received index edged four points higher this month.
Expectations for manufacturing growth over the next six months moderated again this month, as the future general activity index declined from 12.4 in November to 6.7, its lowest reading in three months. The indexes for future new orders and shipments also fell, declining three points and nine points, respectively. The future employment index, however, rose five points.
Thirty-three percent of the firms expect to increase employment over the next six months; 15 percent expect decreased employment.The reading from the Philadelphia Fed is often seen as a barometer for the national reading from the Institute for Supply Management's manufacturing report, which will be released on Jan. 2.