Economy

Philadelphia Fed Index Shows Subdued Manufacturing Growth

April 16, 2015

The Philadelphia Federal Reserve Manufacturing Business Outlook was stronger than expected in April. The index for current activity increased from 5.0 in March to 7.5, beating economist expectations of a reading of 6. The index has been in single digits so far this year indicating only modest growth.

The new orders index registered 0.7, a drop of 3 points from March indicating flat demand during the month. Shipments improved six points but were still in below the neutral reading for the second consecutive month.

Input prices were reported as unchanged by 77 percent of respondents but of the remaining 23 percent, 14 percent reported paying lower prices for raw material. Prices received were unchanged for 80 percent of respondents, with 11 percent reporting receiving lower prices

Employment levels improved compared to March with the index up 8 points to 11.5, its highest reading in five months.

Manufacturers were slightly more optimistic about future activity over the next six months. The index increased from 32.0 to 35.5 but was still well below sentiment expressed over the past year.

Manufacturers reported the stronger dollar having a slightly negative impact on business, with most of the negativity in relation to foreign sales and prices received for exports.