Federal Reserve Bank of Philadelphia: Business Outlook Survey: ‘ad pondus omnium’.

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+ Philadelphia Fed Manufacturing Index (Dec) 26.2 vs. 21.5 expected, previous  22.7

+ Business Conditions 53.5 previous period 50.1

+ Employment 18.1, previous period 22.6

+ New Orders 29.8, previous period 21.4

+ Price Paid 25.4, previous 39.0

Current Indicators Suggest Solid Growth

Nearly 41% of the firms surveyed indicated an increase in activity this month. This is up from 35% of firms reported so last month. Current new orders and shipments increased from last month, albeit modestly, 8 and 2 points, respectively. The moderation suggesting longer delivery times and more unfilled orders.

Moreover, firms reported more hires for the month, keeping the employment index within the positive bounds now for 13 consecutive months. The average workweek index declined 3 points bringing the measure down from its positive territory, where it has been for 14 months in a row; this largely attributed to seasonal effects.

Of the firms surveyed, 26% of them reported higher input prices in December. Which is down from 39% of firms reported so in the previous month. Offsetting this, however, was the price received index increased only modestly from 8.6 in the previous month to December’s reading of 11.3. 

Firms surveyed also expected higher outlays for health benefits in the month’s to come, as reported in the special questions section of the report. All in all, firms remain optimistic given the diffusion index for future general activity increased from 50.1 in November to 53.5  this month. Additionally, the indexes for future new orders and shipments remained upbeat, increasing both by 3 points.

Summary 

Responses to the December Manufacturing
Business Outlook Survey suggest continued growth for
the region’s manufacturing sector. The indexes for
general activity, new orders, shipments, and employment all indicated expansion this month. The firms reported lessened input price pressures compared with last month, but slightly more firms reported price increases for their own manufactured goods. Most broad indicators reflecting firms’ expectations for the next six months improved modestly this month.

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