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Philadelphia Fed March Outlook Indicators Show Growth Picked Up
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Results from the Business Outlook Survey suggest that regional manufacturing activity continued to show improvement in March. The survey's broadest indicators either improved from their readings in February or remained at relatively high levels. Increases in input prices continue to be widespread, and more firms have been reporting increases in prices for their manufactured goods in recent months. The survey's broad indicators of future activity also showed notable improvement this month. Most firms also indicated that they expect acceleration in production over the next quarter.
Indicators Suggest Growth Picked Up
The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 35.9 in February to 43.4 this month. This is the highest reading since January 1984. The demand for manufactured goods is showing continued strength: The new orders index increased 17 points this month, the sixth consecutive monthly increase. The shipments index was little changed this month and remains at a high level. Firms also reported that unfilled orders and delivery times rose again this month. Twice as many firms reported increases in inventories this month (24 percent) than reported decreases (12 percent). And the current inventory index has now been positive for three consecutive months and is at its highest reading in four years.
Firms' responses continue to indicate overall improved labor market conditions. The current employment index fell back 5 points, but for the seventh consecutive month, the percentage of firms reporting an increase in employment (25 percent) is higher than the percentage reporting a decline (7 percent). Over twice as many firms reported a longer workweek (25 percent) than reported a shorter one (12 percent).
Posted: March 17, 2011 Thursday 10:00 AM