Declines in the Philadelphia’s manufacturing sector contracted in June at the slowest pace in three quarters, according to results for this month’s Business Outlook Survey. The Federal Reserve Bank of Philadelphia’s diffusion index (the survey’s broadest measure of manufacturing conditions) climbed to minus 2.2 from minus 22.6 in May, its highest reading since September 2008 when the index was positive for one month.
Philly Fed: Broad indicators of future activity showed significant improvement this month. The future general activity index remained positive for the sixth consecutive month and increased markedly from 47.5 in May to 60.1, its highest reading since September 2003 (see Chart). The index has now increased 71 points since its trough in December.
The new orders and shipments indexes showed parallel increases this month, both rising 21 points, to ‐4.8 and 2.1, respectively.
Firms continue to report employment losses and declines in work hours. The current employment index remained at a relatively weak ‐21.8.
Firms reported less widespread declines in the prices paid for inputs and the prices received for their own manufactured goods.
According to respondents to the June survey, declines in the region’s manufacturing
sector diminished significantly this month. Indicators for general activity, new orders,
and shipments are suggesting steadier levels of activity, in contrast with the series of continuous large declines suggested in previous surveys.
Graph: Philadelphia Fed