By Xavier Fontdegloria
Philadelphia area’s manufacturing sector grew at a slower pace in February compared with the previous month due to slightly softer demand, according to a survey from the Federal Reserve Bank of Philadelphia released Thursday.
The index for current general activity of the Business Outlook Survey decreased to 16.0 in February from 23.2 in January, below the 19.0 reading expected by economists polled by The Wall Street Journal.
The survey polls manufacturing firms in the Third Federal Reserve District–which covers eastern Pennsylvania, southern New Jersey and Delaware–about the direction of change in overall business activity at their plants. Any reading above zero indicates expansion.
The decrease in February mostly offsets January’s rise, the Philly Fed said. Around 26% of firms reported increases in overall activity, and 10% reported decreases compared with the previous month. Most firms, or 63%, reported no change, it said.
Demand for goods continued to increase, but less than the previous month. The new orders index declined to 14.2 from 17.9; while the shipments index fell to 13.4 from 20.8, its lowest reading since August 2020.
The employment index rose to 32.3 from 26.1, signaling that companies accelerated hiring compared with January. More than 38% of the firms reported higher employment, 6% reported lower employment, and 56% reported no change, the report said.
The delivery times index fell to 23.0 from 25.2, indicating that vendor lead times improved somewhat.
The indicators for prices paid and prices received remained high. The prices paid index edged down to 69.3 from 72.5, and the prices received index increased to 49.8 from 46.4. Both indexes suggested that firms continued to report increases in prices for both inputs and their own goods, the Philly Fed said.
The survey’s future indexes signaled that firms continued to anticipate growth over the next six months. The index for future general activity was broadly stable at 28.1. Expectations for new orders, shipments and employment were also positive, according to the survey.
Write to Xavier Fontdegloria at [email protected]
