A manufacturing assembly line at the Heinz factory in Pittsburgh, Pennsylvania. (Photo: Courtesy of Heinz)
The Manufacturing Business Outlook Survey, a regional gauge of factory activity by the Philadelphia Federal Reserve, rose to 23.2 in April. That’s up from 22.3 in March and the two most fundamental readings — new orders and backlogs — continued to post strong readings.
Nearly 37% of the manufacturers saw increases in overall activity this month, while just 14% reported decreases. The indexes for current new orders and shipments actually fell 17 points and 9 points, respectively, but remain very strong.
Manufacturing firms also continued to report increases in employment.
More than 31% saw increases in employment, while 4% reported decreases in April. The current employment index ticked up 2 points to 27.1, the highest reading in 6 months. The firms also reported a longer average workweek this month, with the current average workweek index increasing by 9 points.
Manufacturing Business Outlook Survey for April, 2018. (Source: Philadelphia Federal Reserve)
The diffusion index for future general activity fell from 47.9 in March to 40.7, though firms still remain optimistic.
Nearly 50% of the firms expect factory activity to increase over the next 6 months, while 9% anticipated decreases. The future new orders index fell 12 points, while the future shipments index rose 5 points.
A little more than 68% of the firms expect price increases for purchased inputs over the next 6 months, and 50% expect higher prices for their own manufactured goods. Nearly 42% of the firms expect to add workers over the next 6 months.
However, even though the future employment index fell 3 points, it remains at a high reading of 34.6.
