October 2021
Note: Survey responses were collected from October 12 to October 18.
Manufacturing activity in the region continued to expand this month, according
to the firms responding to the October Manufacturing Business Outlook Survey.
The survey's indicator for general activity declined, the new orders index
improved, and the shipments index held steady. Both price indexes remained
elevated. The survey’s future indexes suggest that the surveyed firms remained
generally optimistic about growth over the next six months.
Current Indicators Remain Positive
The diffusion index for current general activity fell 7 points to 23.8 this
month. More than 40 percent of the firms reported increases in general activity
this month (up from 34 percent last month), while 17 percent reported decreases
(up from 3 percent). The current shipments index was essentially unchanged at
30.0 in October. The index for new orders rose 15 points to a reading of 30.8.
Over 47 percent of the firms reported increases in new orders this month,
while 16 percent reported decreases.
The firms continued to report increases in employment on balance, with the
employment index rising from 26.3 in September to 30.7 this month. The majority
of responding firms (65 percent) reported steady employment levels, and the
share reporting increases (31 percent) exceeded the share reporting decreases (1
percent). The average workweek index fell 2 points to 27.8.
Price Indicators Remain Elevated
The indicators for prices paid and prices received remained elevated this month.
The prices paid index rose 3 points to 70.3. The percentage of firms reporting
increases in input prices (73 percent) far exceeded the percentage reporting
decreases (3 percent); 22 percent of the firms reported no change. The current
prices received index edged down 2 points to 51.1. Over 58 percent of the firms
reported increases in prices received for their own goods this month, 7 percent
reported decreases, and 34 percent reported no change.
Firms Anticipate Higher Capital Expenditures Next Year
For this month's special questions, manufacturers were asked about their plans
for different categories of capital spending next year (see Special Question).
For five out of six categories of investment spending (software, noncomputer
equipment, computer equipment, energy-saving investments, and other), the share
of firms expecting to increase spending was higher than the share of firms
expecting to decrease spending. On balance, the firms expect larger increases
for software and noncomputer equipment and a small net decrease in capital
expenditures on structure next year.
Firms Remain Optimistic About Growth
The diffusion index for future general activity rose 4 points to 24.2. The share
of firms expecting increases in activity over the next six months (47 percent)
exceeded the share expecting decreases (23 percent). The future new orders index
declined 6 points, while the future shipments index fell 11 points. The firms
continued to expect overall increases in employment over the next six months,
with the future employment index ticking down 1 point to 37.5. Over 45 percent
of the firms expect to increase employment in their manufacturing plants
over the next six months; only 8 percent anticipate employment declines.
Summary
Responses to the October Manufacturing Business Outlook Survey suggest continued
expansion in regional manufacturing conditions this month. The indicator for
current activity fell from its September reading, while the new orders index
rose and the shipments index remained stable. The price indexes remain elevated
and continue to suggest widespread increases in prices. The survey's future
indexes indicate that respondents continue to expect growth over the next six
months.
Special Question (October 2021)
Comparing 2022 with 2021, do you expect capital expenditures to be higher, the same,
or lower for each of the following categories?
Higher Same Lower Diffusion
--------(% of reporters)------- Index
Software 37.5 52.1 10.4 27.1
Noncomputer equipment 50.0 37.5 12.5 37.5
Energy-saving investments 20.8 66.7 12.5 8.3
Computer and related hardware 29.2 60.4 10.4 18.8
Structure 25.0 45.8 29.2 -4.2
Other 18.2 72.7 9.1 9.1
Total capital spending 53.2 31.9 14.9 38.3
October 2021
October vs. September Six Months from Now
vs. October
Prev. Prev.
Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff.
Index Index Index Index
General Business 30.7 40.3 41.2 16.5 23.8 20.0 46.9 20.9 22.7 24.2
Conditions
New Orders 15.9 47.1 36.6 16.3 30.8 32.1 42.4 37.2 16.1 26.2
Shipments 29.9 43.3 41.9 13.3 30.0 41.6 50.9 24.2 20.5 30.5
Unfilled Orders 5.4 30.1 51.7 17.4 12.7 -10.0 13.8 50.9 31.9 -18.1
Delivery Times 20.4 41.6 49.0 9.4 32.2 7.8 20.7 52.0 22.3 -1.7
Inventories 19.2 30.9 54.5 12.0 18.8 14.4 37.2 44.3 13.6 23.6
Prices Paid 67.3 73.3 21.9 3.0 70.3 53.5 65.3 28.1 1.2 64.1
Prices Received 52.9 58.4 33.5 7.3 51.1 62.2 58.8 38.4 0.0 58.8
Number of Emp. 26.3 31.2 65.4 0.5 30.7 38.6 45.1 42.0 7.6 37.5
Avg. Emp. Wrkwk. 29.3 33.4 61.1 5.6 27.8 15.4 35.1 52.8 7.9 27.2
Capital Ex. -- -- -- -- -- 23.6 37.6 52.3 5.2 32.4
Notes: (1) Diffusion indexes represent the percentage of respondents indicating
an increase minus the percentage indicating a decrease.
(2) All data are seasonally adjusted.
(3) Percentages may not sum to 100 because of rounding,
omission by respondents, or both.
(4) Survey results reflect data received through October 18, 2021.
Federal Reserve Bank of Philadelphia
Manufacturing Business Outlook Survey
Released: October 21, 2021, at 8:30 a.m. ET.