PHILLY FED SURVEY +5 TO -1.9

New orders turned slightly positive but order backlogs remained negative.

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased 5 points, to a reading of ‐1.9. Although this marks the fifth consecutive negative reading for the index, the index has been edging nearer to zero over the last three months. Nearly 23 percent of firms reported declines in activity this month, down from 30 percent last month.

The demand for manufactured goods, as measured by the current new orders index, improved 7 points from last month and recorded its first positive reading in five months. Shipments fell notably this month, however: The current shipments index fell 10 points to ‐ 21.2. Declines in inventories were more widespread this month, and firms reported continued declines in unfilled orders and shorter delivery times.

Labor market conditions at the reporting firms remained weak this month. The current employment index, at ‐7.3, was little changed from its reading in July and August. The percentage of firms reporting decreases in employment (22 percent) exceeded the percentage
reporting increases (15 percent). Firms also indicated fewer hours worked: The average workweek index increased 7 points but posted its sixth consecutive negative reading.

image

The prices firms paid for purchased inputs rose modestly this month, while prices for their final manufactured goods remained steady. The prices paid index decreased from 11.2 to 8.0, with 24 percent of the firms reporting input price increases. With respect to their own manufactured goods, firms reported steady prices, on balance. The percentage reporting an increase in product prices was offset by the same percentage reporting a decrease (13 percent).

image

Pointing up  In supplemental questions, firms were asked to estimate their total production growth for the third quarter ending this month and expected growth for the fourth quarter. Firms forecasting total decreases in third quarter production (47 percent) exceeded those forecasting increases (35 percent). The average production growth rate for the reporting group was an expected decline of nearly 1 percent.

With regard to the fourth quarter, the percentage of firms expecting a deceleration in the rate of their production growth (45 percent) was greater than the percentage expecting acceleration in growth (32 percent).

image

 

Leave a Reply

Your email address will not be published. Required fields are marked *