U.S. Philadelphia Fed Manufacturing Index Weakens in November

The Current General Activity Diffusion Index declined to -5.5 during November after improving to 10.3 in October, according to the Manufacturing Business Outlook Survey (MBOS) from the Federal Reserve Bank of Philadelphia, indicating deterioration in factory sector activity this month. A reading of 6.4 had been expected in the Action Economics Forecast Survey. Eighteen percent of the firms reported increases in general activity in November while 23.1% reported decreases. Responses to this month's survey were collected between November 11 and November 18.

Haver Analytics calculates an ISM-adjusted current activity diffusion index from five key components using the methodology along the lines of the national ISM index. The index declined to 49.2 In November and reversed all of its October improvement to 52.7.

The new orders index fell to 8.9 this month after rising to 14.2 in October, while the shipments series declined to 4.5 after rising to 7.4. The unfilled orders index rose to 6.8 after improving to -1.5 and the delivery times reading weakened to -2.1 after rising to 10.2 in October. The inventories index increased to 5.4 after falling to 0.5 last month.

The number of employees’ index increased to 8.6 in November after falling to -2.2 in October, suggesting an overall increase in employment. Seventeen percent of respondents reported increases in employment in November while 8.5% reported declines. The average employee workweek index surged to 17.4, its highest level since April 2022, from -11.8 in October.

Inflation indicators weakened this month. The prices paid index declined to 26.6 in November after falling to 29.7 last month. The index had risen in September to the highest level since December 2022. A lessened 26.6% of respondents reported increases in input prices in November while none reported decreases. The prices received index declined to 14.3 after falling to 17.9 in October. A lessened 15.4% of respondents reported increases in prices while a decreased 1.1% reported declines.

The future activity index surged to 56.6 during November after rising to 36.7 in October. The reading was 15.8 in September. Most of the components rose, notably new orders and employment. Shipments and unfilled orders increased moderately to new highs. The prices paid series jumped to the highest level since April 2022 while prices received also strengthened. The expected capital spending measure rose slightly and was near its highest level in two and one-half years.

The Manufacturing Business Outlook Survey (MBOS), conducted by the Federal Reserve Bank of Philadelphia, 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. The diffusion indexes in the MBOS represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. The series from the survey dating back to May 1968 can be found in Haver's SURVEYS database. The expectations forecast figures are from the Action Economics Forecast Survey in AS1REPNA.