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Philadelphia Fed Nov Outlook Suggest Activity Is Picking Up
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Activity in the region's manufacturing sector is picking up, according to firms polled for this month's Business Outlook Survey. Indexes for general activity, new orders, and shipments all improved this month. The overall level of employment was mostly steady this month, and the average work hours index was positive for the first time in more than two years. The region's manufacturing executives expect increasing activity over the next six months, although expectations have moderated somewhat in the last several months. Low rates of current capacity utilization are suppressing capital spending plans.
Indicators Suggest Activity Is Picking Up
The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, increased from a reading of 11.5 in October to 16.7 this month. The index has now remained positive for four consecutive months (see Chart). The percentage of firms reporting increases in activity this month (29 percent) exceeded the percentage reporting decreases (12 percent). Other broad indicators suggest similar improvement this month. The current new orders index also remained positive for the fourth consecutive month and increased nine points. The current shipments index increased 12 points. The current inventory index, although still negative, increased 15 points, from -31.8 in October to -17.3 this month. Indexes for unfilled orders and delivery times remained negative.
Labor market conditions have been stabilizing in recent months. The current employment index increased six points, from -6.8 to near zero. The percentage of firms reporting employment increases and decreases were essentially the same this month (14 percent). The workweek index edged seven points higher in November to its first positive reading in 23 months.
Posted: November 19, 2009 Thursday 10:00 AM