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Firms See Increase in Business Activity

For immediate release
Contact: Katherine Dibling, E-mail Senior Media Representative, (215) 574-4119

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Results from the Business Outlook Survey suggest that regional manufacturing activity continued to improve in December. All of the broad indicators remained positive and suggest an expansion of activity. The diffusion index of current activity increased to 24.3 in December from 22.5 in November.

Increases in input prices were more widespread this month, and more firms reported increases in prices for their manufactured goods. The survey’s broad indicators of future activity suggest that optimism among the region’s manufacturing executives also continues to improve.

Special Questions: Expectations for Changes in Costs in 2011

  • Firms were asked about their expectations for changes in costs for inputs and labor for the coming year. They were also asked how the expected changes in costs compare to 2010 costs.
  • The firms see the largest annual increase in costs coming from health benefits. The average expected increase is 8.6 percent. Wages and non-health-care costs are expected to increase on average by 2.1 and 2.3 percent, respectively.
  • Costs for energy, raw materials, and intermediate goods are expected to rise on average by 3.1, 3.9, and 2.7 percent, respectively.
  • In every category the percentage of firms indicating that their costs would be higher in 2011 was greater than the percentage reporting that their costs would be lower.


  • Fifty-two percent of the firms reported higher prices for inputs, compared with 38 percent in November.
  • On balance, the firms also reported a rise in prices for manufactured goods. More firms reported increases (21 percent) than reported decreases (10 percent). The prices received index increased 13 points, its first positive reading in eight 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. 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 survey's annual historical revisions, which incorporate new seasonal adjustment factors, will be released at 10 a.m. on Thursday, January 13, 2011. The next Business Outlook Survey will be released at 10 a.m., Thursday, January 20, 2011, 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.

Related Resources

Latest Chart for State Coincident Indexes

Download the chart for this month's survey. (50 KB)

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(215) 574-7163
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