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Firms Say Conditions Continue to Deteriorate

For release: 10 a.m., November 20, 2008
Contact: Katherine Dibling, E-mail senior media representative, (215) 574-4119

Philadelphia, Pa. - Conditions in the region's manufacturing sector continue to deteriorate in November, according to firms polled for the Business Outlook Survey. The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from -37.5 in October to -39.3 this month. In special questions, the firms were asked about their expectations for changes in their firms' production levels in the fourth quarter and in employment over the next six months

Philadelphia Federal Reserve Senior Economic Analyst Mike Trebing summarized the survey:

“Indicators from our Business Outlook Survey suggest that conditions in the region's manufacturing sector continued to deteriorate this month. All of the survey's broad indicators — general activity, new orders, shipments, and employment — remained negative and most edged somewhat lower than in October. Consistent with weakening conditions, firms reported price decreases for both inputs and their own manufactured goods this month. In response to special questions, over half of the firms expect reductions in production for the fourth quarter, and most of these firms attributed the expected decreases to changes in business conditions. Most of the survey's indicators of future activity also weakened further this month and suggest that the region's manufacturing executives expect continued decreases over the next six months.”

This survey, which was started in 1968, gathers information on the manufacturing industry in the Third Federal Reserve District covering eastern Pennsylvania, southern New Jersey, and Delaware. Participation in the survey is limited to manufacturing firms with plants in the area with more than 100 employees. The survey asks aboutthe current pace of business in the participants' plants and their future expectations of business.

To arrange an interview, contact Katherine Q. Dibling, E-mail the Bank's senior media representative, at (215) 574-4119. The next survey will be released at 10 a.m., Thursday, December 18, 2008, and will be made available on our website, and over Businesswire. External Link The aggregate historical data series is also available on the Bank's website.

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