The Philly Fed Business Outlook Survey insignificantly declined but remains in expansion. Key elements declined.
Analyst Opinion of the Philly Fed Business Outlook Survey
Consider this a weaker report than last month as key elements declined – and backlog now is in contraction.
This is a very noisy index which readers should be reminded is sentiment based. The Philly Fed historically is one of the more negative of all the Fed manufacturing surveys but has been more positive than the others recently.
The index moved from +22.9 to +22.2. Positive numbers indicate market expansion, negative numbers indicate contraction. The market expected (from Econoday) 16.2 to 22.9 (consensus +20.3).
Regional manufacturing activity continued to grow in October, according to results from this month’s Manufacturing Business Outlook Survey. The survey’s broad indicators for general activity, new orders, shipments, and employment remained positive and near their readings in September. The firms reported continued growth in employment and an increase in the average workweek this month. Expectations for the next six months remained optimistic.
Survey Indexes Suggest Steady Growth
The diffusion index for current general activity edged down slightly, from 22.9 in September to 22.2 this month (see Chart 1). Nearly 36 percent of the manufacturers reported increases in overall activity this month, while 14 percent reported decreases. The new orders index decreased 2 points to 19.3, while the current shipments index increased 5 points to 24.5. The firms reported nearly no change in levels of inventories during October, as well as unfilled orders and delivery times (all of the indexes were near zero).
Econintersect believes the important elements of this survey are new orders and unfilled orders . New orders modestly declined but remains in expansion whilst unfilled orders significantly declined and now is in contraction.
