Philadelphia Fed Manufacturing Business Outlook Survey Easily Beats Forecast in December

A manufacturing assembly line at the Heinz factory in Pittsburgh, Pennsylvania. (Photo: Courtesy of Heinz)

The Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey rose 3.5 points to 26.2 in December, easily beating the 21.8 consensus forecast.

New orders soared in December, rising more than 8 points to an extraordinarily strong 29.8. Unfilled orders slowed slightly but also remains very strong at 10.8. Shipments are at a quick 23.4 pace and input costs remain high.

Employment is also strong yet, down 5 at 18.1, could signal a lack of available labor due to the skills gap. The current employment index still remained in positive territory, where it has been for 13 consecutive months. More than 29% of the responding firms reported increases in employment, while just 11% report decreases this month.

The average workweek index fell 3 points after being in positive territory for 14 consecutive months.

Nevertheless, optimism on the general outlook rose more than 3 points to 53.5, one of the strongest readings of the expansion.