Manufacturing Slumps In December Philadelphia Fed Survey


The December Manufacturing Business Outlook Survey indicated essentially flat growth in the region’s manufacturing sector this month. Although they all remained positive, the indicators for general activity and employment declined, while the indicators for new orders and shipments edged higher. The survey’s future indexes indicate that respondents continue to expect growth over the next six months.


Manufacturing activity in the region was flat this month, according to results from the December Manufacturing Business Outlook Survey. The survey’s broad indicator for current activity dropped to a reading near zero this month, although indicators for new orders, shipments, and employment remained at higher positive readings. The survey’s future activity indexes remained positive, suggesting continued optimism about growth for the next six months. – Philadelphia Federal Reserve

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The firms continued to report overall increases in the prices paid for inputs, with the index rising 11 points to 19.0 (see Chart 2). Over 25 percent of the respondents reported higher input prices, up from 17 percent in November. The current prices received index, reflecting the manufacturers’ own prices, ticked down to a reading of 11.9. Over 80 percent of the firms reported no change in their own product prices this month.  – Philadelphia Federal Reserve

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Manufacturing Business Outlook Survey

The Manufacturing Business Outlook Survey is a monthly survey of manufacturers in the Third Federal Reserve District. Participants indicate the direction of change in overall business activity and in the various measures of activity at their plants: employment, working hours, new and unfilled orders, shipments, inventories, delivery times, prices paid, and prices received.

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Relevance Of The Survey

Although the Philadelphia Federal Reserve Manufacturing Business Outlook Survey only looks at manufacturers in a small location of the United States, it is a useful indicator of economic and business activity across the nation. Manufacturing is central to overall economic activity  and the health of the sector is an indicator of the health of the overall economy, and the Philadelphia Fed Survey is often looked to as a time-tested early indicator of the problems in the regional sector and consequently in the entire U.S. economy.