Recent Updates

  • Sweden: Consumer Confidence, Business Tendency Survey, Public Finance (Mar)
  • Spain: Mortgage Market (Jan), Order Book Forecast (Mar)
  • Italy: ISTAT Business & Consumer Survey Press Release (Mar)
  • Germany: Business Registrations & Deregistrations (Dec), Import & Export Prices (Feb), IAB Labor Market Barometer (Mar)
  • Vietnam: GDP (Q1), CPI, IP, International Trade, Passenger & Cargo Traffic Statistics, Manufacturing Sales and Inventories, International Visitor Arrivals (Mar); Korea: Economic Sentiment
  • more updates...

Economy in Brief

Philadelphia Fed Factory Index Declines; Prices Surge
by Tom Moeller  March 16, 2017

The Philadelphia Federal Reserve reported that its General Factory Sector Business Conditions Index fell to 32.8 during March from an unrevised 43.3 in February. The latest monthly reading compared to expectations for 29.5 in the Action Economics Forecast Survey.

The ISM-Adjusted General Business Conditions Index constructed by Haver Analytics surged to 60.2 this month, the highest level since July 2004. The ISM-Adjusted headline index is the average of five diffusion indexes: new orders, shipments, employment, supplier deliveries and inventories with equal weights (20% each). This figure is comparable to the ISM Composite Index. During the last ten years, there has been a 71% correlation between the adjusted Philadelphia Fed Index and real GDP growth.

Despite the decline in the overall business conditions index, shipments, unfilled orders and inventories increased. New orders and delivery times improved just modestly, the latter indicating fairly stable delivery speeds.

The employment series rose to the highest level since November 2014. During the last ten years, there has been an 81% correlation between the jobs index and the m/m change in manufacturing sector payrolls. The average workweek reading strengthened significantly to an expansion high.

Prices paid strengthened to the highest level since May 2011. Forty-one percent of respondents (NSA) reported paying higher prices, while none paid less.

The future business activity index increased to the highest level since August 2014. Most component series increased m/m, notably prices paid to its 2011 high.

The survey panel consists of 150 manufacturing companies in Federal Reserve District III (consisting of southeastern PA, southern NJ and Delaware). The diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease in activity. The ISM adjusted figure, calculated by Haver Analytics, is the average of five diffusion indexes: new orders, production, employment, supplier deliveries and inventories with equal weights (20% each). Each diffusion index is the sum of the percent responding "higher" and one-half of the percent responding "same."

The figures from the Philadelphia Federal Reserve can be found in Haver's SURVEYS database. The Action Economics figure is available in AS1REPNA.

Philadelphia Fed - Manufacturing Business Outlook Survey (%, SA) Mar Feb Jan Mar'16 2016 2015 2014
General Factory Sector Business Conditions 32.8 43.3 23.6 10.6 4.8 3.6 18.3
ISM-Adjusted Business Conditions 60.2 55.6 55.5 50.3 48.2 49.4 53.7
  New Orders 38.6 38.0 26.0 12.7 4.9 2.9 14.9
  Shipments 32.9 28.6 20.5 16.7 6.9 3.1 16.3
  Unfilled Orders 14.4 10.7 10.7 -15.0 -5.5 -5.1 3.3
  Delivery Time 4.5 4.1 5.4 -3.1 -4.6 -4.1 0.6
  Inventories 11.8 -4.7 12.2 -12.6 -9.7 -1.5 1.7
  Number of Employees 17.5 11.1 12.8 -2.0 -5.7 3.9 10.5
  Prices Paid 40.7 29.9 32.5 1.5 13.5 1.5 21.6
close
large image