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Firms See Declines in Business Activity

For immediate release
Contact: Katherine Dibling, E-mail senior media representative, (215) 574-4119

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Regional manufacturing executives responding to the Business Outlook Survey in August reported moderate weakness in the sector. The survey's broadest indicators suggest that activity in the sector shrank. The general activity index decreased to - 7.7 from a reading of 5.1 in July.

The percentage of firms reporting declines in new orders and shipments exceeded the percentage reporting increases. Labor market conditions in the sector receded in August, as more respondents cut the number of employees and hours worked than increased them.

While the firms continue to expect growth in the manufacturing sector, their optimism has waned.

Special Questions: Exporting Activity

  • About 30 percent of the firms indicated that the share of sales attributed to exports increased over the past year, a trend consistent with the previous two years.
  • Among firms that reported an increase in export share, the mean response indicates that 13.6 percent of sales growth is attributable to exports.
  • Since the start of 2010, roughly 10 percent of firms have moved some activities abroad; only 5 percent have returned activities to the U.S.


  • More firms reported decreases in prices (19 percent) than reported increases (6 percent).
  • The largest percentage, 70 percent, reported no change in prices for their manufactured goods.
  • Firms reported somewhat less cost pressures over the past three months.

Orders, Shipments, Delivery Times

  • The new orders index fell slightly, to -7.1.
  • The shipments index turned negative, declining to -4.5.
  • Indicating weakness, indexes for both delivery times and unfilled orders remained negative this month.

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. The survey asks about the current pace of business in the participants' plants and their future expectations of business.

To arrange an interview, contact Katherine Dibling, E-mail the Bank's senior media representative, at (215) 574-4119. The next Business Outlook Survey will be released at 10 a.m., Thursday, September 16, 2010, 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.

The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank holding companies, and provides financial services to depository institutions and the federal government. It is one of the 12 regional Reserve Banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Philadelphia Federal Reserve Bank serves eastern Pennsylvania, southern New Jersey, and Delaware.

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