A worker in the mid-Atlantic manufacturing sector works with raw aluminum materials. (PHOTO: REUTERS)
The Philadelphia Federal Reserve’s gauge of manufacturing activity in the Mid-Atlantic region slipped to 9.7 in October from a 12.8 the month prior. The median forecast for the Manufacturing Business Outlook Survey, which has remained at least slightly positive for three months, called for a reading of 5.3.
A reading above 0 indicates expansion, while those below suggest contraction.
The diffusion index of current activity remained positive, but the index edged down from 12.8 in September to 9.7 this month. While indexes for general activity, new orders, and shipments were all positive this month, firms reported continued weakness in overall labor market conditions.
The new orders index increasing significantly from 1.4 in September to 16.3 in October, while the percentage of firms reporting increases in new orders this month rose to 40 percent from 30 percent. The current shipments index also improved, rising 24 points to 15.3. However, delivery times, unfilled orders, and inventories indexes remained weak, all registering in negative territory.
The manufacturing sector overall, which represents roughly 12.5% of the U.S. economy, has struggled to regain steam post the Great Recession. The Empire State Manufacturing Survey again contracted this month and the sector was on life support for much of 2015 to 2016.
The average capacity utilization rate reported by mid-Atlantic manufacturing firms was nearly 74%, lower than that from one year earlier (75%). For the U.S., the capacity utilization rate for the manufacturing sector, overall, is estimated to be almost 75%, also slightly lower than one year ago.
One of the 12 regional Banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System, the Philadelphia Federal Reserve Bank serves eastern Pennsylvania, southern New Jersey, and Delaware.
