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Manufacturing Activity in Philly Fed’s District Slows in August

Manufacturing activity in the U.S. Third Federal Reserve District expanded in August, though less so than during the prior two months, data from the Federal Reserve Bank of Philadelphia’s Manufacturing Business Outlook survey showed Thursday.

The diffusion index for current general activity decreased seven points, to 17.2, in August. The indicator is below economists’ forecasts in a The Wall Street Journal poll, which estimated the index to be at 20.0.

The survey polls manufacturers in the Third Federal Reserve District–which covers eastern Pennsylvania, southern New Jersey and Delaware–about the direction of change in overall business activity and in various other measures at their plants.

Despite its lower reading compared with July, the index signals that overall manufacturing activity in the region is expanding for a third straight month, after June’s strong rebound.

Manufacturing activity, however, is still below February’s pre-pandemic levels, when the diffusion index stood at 36.70.

“The survey’s current indicators for general activity, new orders, and shipments remained positive for the third consecutive month but fell from their readings in July,” the Philly Fed said. Survey responses were collected from Aug. 10 to Aug. 17.

For August, 28% firms reported increases in activity, while 11% reported decreases.

The Index for new orders fell to 19 from 23, while the current shipments index declined about six points, to 9.4.

The Current Employment index fell about 11 points, to 9, for August, with 23% of firms reporting increases of employment.

The diffusion index for future general activity rose 3 points from its July reading to 38.8.

“Most of the future indicators remained elevated, suggesting that the firms expect growth over the next six months,” the Philly Fed said.
Source: Dow Jones

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