Research >> Economics

Philadelphia Fed NonManufacturing Survey suggest activity weakened in March 2023


Nonmanufacturing activity in the region weakened this month, according to the firms responding to the March Nonmanufacturing Business Outlook Survey. The index for general activity fell to a near-zero reading, and the index for new orders at the firm level turned negative. The sales/revenues index also decreased but remained positive, and the full-time employment index declined to a low but positive reading this month. The prices paid and prices received indexes both fell. Although firms continue to expect growth over the next six months on balance, expectations were less widespread.

Current and Future General Activity Indexes for Firms

Current Indexes Weaken

The diffusion index for current general activity at the firm level fell from a reading of 15.8 in February to -0.1 this month (see Chart 1). The firms were evenly split between reporting increases and decreases (31 percent); 37 percent reported no change in activity. The new orders index fell 22 points to -15.4 this month, its first negative reading since December. More than 18 percent of the firms reported increases in new orders (down from 33 percent), while 34 percent reported decreases (up from 27 percent). The sales/revenues index decreased 4 points to 10.3. Almost 40 percent of the responding firms reported increases in sales/revenues, while 29 percent reported decreases. The regional activity index declined from 3.2 to -12.8 this month, a reading last seen in December.

Employment Indicators Weaken

On balance, the firms reported increases in full-time employment this month, but the index fell 13 points to 3.2, its lowest reading since June 2021. More than 71 percent of the firms reported steady full-time employment levels, while the share of firms reporting increases (16 percent) was slightly higher than the share reporting decreases (13 percent). The part-time employment index declined from 3.2 to -6.8.

Price Increases Are Less Widespread

The prices paid and prices received indexes continued to indicate overall price increases but declined this month, suggesting less widespread increases. The prices paid index decreased 11 points to 37.9 (see Chart 2). Over 44 percent of the respondents reported higher input prices, 37 percent reported no change, and 6 percent reported decreases. Regarding prices for the firms' own goods and services, the prices received index fell from 31.6 to 18.1. The share of firms reporting increases in the prices received (26 percent) exceeded the share reporting decreases (8 percent). Most of the firms (55 percent) reported no change in prices for their own goods and services.

Prices Paid and Prices Received Index

Firms Report Higher Sales/Revenues and Lower Constraints

In this month's special questions, the firms were asked to estimate their total sales/revenues growth for the first quarter ending this month compared with the fourth quarter of 2022; they were also asked about factors constraining business operations. The share of firms reporting expected increases in first-quarter sales/revenues (49 percent) was greater than the share reporting decreases (35 percent). Most of the firms indicated that supply chains and labor supply were at least slightly constraining activity in the current quarter (67 percent and 70 percent, respectively). Looking ahead over the next three months, most of the firms expect the impacts of various factors to stay the same, and 27 and 29 percent of the firms expect supply chain and labor supply impacts to improve, respectively. However, 44 percent of the firms expect financial capital impacts to worsen, up from 37 percent in December.

Firms Anticipate Growth

The future activity indexes suggest firms expect growth at their own companies over the next six months, but optimism was less widespread compared with last month. The diffusion index for future general activity decreased 12 points to 12.3 (see Chart 1). Over 40 percent of the firms expect an increase in activity at their firms over the next six months, 28 percent expect decreases, and 29 percent expect no change. The future regional activity index decreased from 12.4 to -3.5, its first negative reading since November.

Summary

Responses to this month's Nonmanufacturing Business Outlook Survey suggest weakened nonmanufacturing activity in the region. The indicator for firm-level general activity was flat, the index for new orders turned negative, and the index for sales/revenues declined but remained positive. The full-time employment index fell to a low but positive reading. Both price indexes decreased but continue to indicate overall price increases. Overall, the responding firms expect growth over the next six months at their own firms.

Special Questions (March 2023)

1. How will your firm's total sales/revenues for the first quarter of 2023 compare with that of the fourth quarter of 2022?
An increase of: % of firms Subtotals
10% or more 10.5 % of firms reporting an increase: 49.1
5-10% 12.3
0-5% 26.3
No change 15.8
A decline of:
0-5% 14.0 % of firms reporting a decrease: 35.1
5-10% 5.3
10% or more 15.8
2. In the current quarter, to what degree have the following factors acted as constraints on business operations?
Not at all
(%)
Slightly
(%)
Moderately
(%)
Significantly
(%)
COVID-19 mitigation measures 79.7 15.6 3.1 1.6
Energy markets 54.0 28.6 9.5 7.9
Financial capital 53.1 26.6 6.3 14.1
Labor supply 29.7 32.8 25.0 12.5
Supply chains 32.8 35.9 14.1 17.2
Other factors 44.1 26.5 11.8 17.6
3. Over the next three months, how do you expect the impacts of the following factors as constraints on business operations to change?
Worsen
(%)
Stay the same
(%)
Improve
(%)
COVID-19 mitigation measures 1.6 72.1 26.2
Energy markets 21.3 62.3 16.4
Financial capital 44.3 50.8 4.9
Labor supply 16.1 54.8 29.0
Supply chains 11.3 61.3 27.4
Other factors 12.5 87.5 0.0

Summary of Returns (March 2023)

Summary of Returns


Click to Link




Posted: March 21, 2023 Tuesday 08:30 AM




Tags - Research
ADP EMPLOYMENT
BEIGE BOOK
BUSINESS BAROMETER
BUSINESS INVENTORIES
CASE-SHILLER
CEO CONFIDENCE
CHALLENGER LAYOFFS
CHICAGO FED MIDWEST MFG
CHICAGO FED NATL ACTIVITY
CHICAGO PMI
CONSTRUCTION SPENDING
CONSUMER CONFIDENCE
CONSUMER CREDIT
CPI
CURRENT ACCOUNT
DURABLE GOODS
EMPLOYMENT COST INDEX
EMPLOYMENT TRENDS INDEX
EXISTING HOME SALES
FACTORY ORDERS
FOMC STMT
FOMC
GDP
HELP WANTED HWOL
HOUSING STARTS
ICSC CHAIN STORE
IMPORT PRICE INDEX
INDUSTRIAL PRODUCTION
INTERNATIONAL TRADE
ISM MFG
ISM NON-MFG
JOB OPENINGS
JOBLESS CLAIMS
KANSAS CITY FED MFG
LEADING INDEX
MASS LAYOFFS
MICH CONSUMER CONFIDENCE
MORTGAGE APPS
NAHB INDEX
NAPM-NY
NBER
NEW HOME SALES
NEW YORK FED MFG
NFIB OPTIMISM INDEX
NONFARM EMPLOYMENT
PAYCHEX-IHS SMALL JOBS
PENDING HOME SALES
PERSONAL INCOME
PHILA FED FORECASTERS
PHILA FED MFG
PHILA FED NON-MFG
PPI
PRODUCTIVITY GROWTH
REAL HOURLY EARNINGS
RETAIL SALES
RICHMOND FED MFG
TEXAS FED MFG
TREASURY INTL CAPITAL
WHOLESALE INVENTORIES
Archives
Mar 2024
Feb 2024
Jan 2024
Dec 2023
Nov 2023
Oct 2023
Sep 2023
Aug 2023
Jul 2023
Jun 2023
May 2023
Apr 2023
Mar 2023
Feb 2023
Jan 2023
Dec 2022
Nov 2022
Oct 2022
Sep 2022
Aug 2022
Jul 2022
Jun 2022
May 2022
Apr 2022
Mar 2022
Feb 2022
Jan 2022
Dec 2021
Nov 2021
Oct 2021
Sep 2021
Aug 2021
Jul 2021
Jun 2021
May 2021
Apr 2021
Mar 2021
Feb 2021
Jan 2021
Dec 2020
Nov 2020
Oct 2020
Sep 2020
Aug 2020
Jul 2020
Jun 2020
May 2020
Apr 2020
Mar 2020
Feb 2020
Jan 2020
Dec 2019
Nov 2019
Oct 2019
Sep 2019
Aug 2019
Jul 2019
Jun 2019
May 2019
Apr 2019
Mar 2019
Feb 2019
Jan 2019
Dec 2018
Nov 2018
Oct 2018
Sep 2018
Aug 2018
Jul 2018
Jun 2018
May 2018
Apr 2018
Mar 2018
Feb 2018
Jan 2018
Dec 2017
Nov 2017
Oct 2017
Sep 2017
Aug 2017
Jul 2017
Jun 2017
May 2017
Apr 2017
Mar 2017
Feb 2017
Jan 2017
Dec 2016
Nov 2016
Oct 2016
Sep 2016
Aug 2016
Jul 2016
Jun 2016
May 2016
Apr 2016
Mar 2016
Feb 2016
Jan 2016
Dec 2015
Nov 2015
Oct 2015
Sep 2015
Aug 2015
Jul 2015
Jun 2015
May 2015
Apr 2015
Mar 2015
Feb 2015
Jan 2015
Dec 2014
Nov 2014
Oct 2014
Sep 2014
Aug 2014
Jul 2014
Jun 2014
May 2014
Apr 2014
Mar 2014
Feb 2014
Jan 2014
Dec 2013
Nov 2013
Oct 2013
Sep 2013
Aug 2013
Jul 2013
Jun 2013
May 2013
Apr 2013
Mar 2013
Feb 2013
Jan 2013
Dec 2012
Nov 2012
Oct 2012
Sep 2012
Aug 2012
Jul 2012
Jun 2012
May 2012
Apr 2012
Mar 2012
Feb 2012
Jan 2012
Dec 2011
Nov 2011
Oct 2011
Sep 2011
Aug 2011
Jul 2011
Jun 2011
May 2011
Apr 2011
Mar 2011
Feb 2011
Jan 2011
Dec 2010
Nov 2010
Oct 2010
Sep 2010
Aug 2010
Jul 2010
Jun 2010
May 2010
Apr 2010
Mar 2010
Feb 2010
Jan 2010
Dec 2009
Nov 2009
Oct 2009
Sep 2009
Aug 2009
Jul 2009
Jun 2009
May 2009
Apr 2009
Mar 2009
Feb 2009
Jan 2009
Dec 2008
Nov 2008
Oct 2008
Sep 2008
Aug 2008






National Association for Business Economics
NABE

Founded in 1920, the National Bureau of Economic Research is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works.

CFA Institute

Quick Links
Barron's Online
Bloomberg
CNBC
CNBC TV Live
CNet Investor
Financial Times (UK)
Forbes
Kudlow Podcast
MSNBC TV Live
NBC News
NY Times
The Economist
TheStreet.com
Wall St Journal
Dismal Scientist
Dr. Ed Yardeni
FRED Graph
Lawrence Kudlow
GDPNow
NABE
ABC News
CNNfn
Institutional Investor
MarketWatch
Cash Prices - WSJ.com
Dollar Index
Dr. Jeremy Siegel
Market Map
NY RBOB Gas
PriceStats
Rig Count
Shadow Fed - SOMC
The Billion Prices Project
BankStocks.com
Dow Jones Indices
Morningstar
SP Indices
Mt Washington Observatory
Weather.com
Yahoo!!