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Firms See Slower Pace of Growth in Business Activity

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

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Regional manufacturing activity continued to grow in April but at a slower pace than last month, according to the respondents to the Business Outlook Survey. Nearly all of the survey’s broadest indicators remained positive but fell from their readings in March. The diffusion index of current activity decreased to 18.5 from 43.4 in March.

Increases in input prices continue to be widespread, and a significant percentage of firms reported increases in prices for their own manufactured goods. The survey’s indicators of future activity fell notably this month; however, most firms expect continued growth over the next six months.

View a video of the press conference on our YouTube channel. YouTube

Special Questions: Exports

  • The average firm in the survey’s reporting group exports approximately 12 percent of its output. Among the firms that export, about 40 percent expect the share of products for export to increase.
  • Firms were also asked about any adverse effects of the recent crisis in Japan or other international events on the availability of raw materials or other products. The largest percentage of firms (80 percent) indicated no effect; 10 percent indicated some current adverse effects; and 10 percent cited possible future effects.

Firms Continue to Report Higher Prices

  • Fifty-nine percent of the firms reported higher prices for inputs this month compared to 64 percent last month.
  • Thirty percent of firms reported higher prices for their own goods this month; just 3 percent reported price reductions.

Firms See Improved Labor Market Conditions

  • Firms' responses continue to indicate overall improvement in labor markets.
  • The percentage of firms reporting an increase in employment (20 percent) is higher than the percentage reporting a decline (8 percent). Over twice as many firms reported a longer workweek (32 percent) than reported a shorter one (14 percent) and the workweek index increased 5 points.

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, May 19, 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

Business Outlook Survey

Download the chart for this month's survey. (45 KB)

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