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Manufacturers Continue to See Weakness

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

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Responses to September's Business Outlook Survey suggest that regional manufacturing
activity is continuing to contract, but declines are less widespread than in August. The survey's indicators for activity, shipments, and new orders all remained negative for the second consecutive month. But the diffusion index of current activity increased to -17.5 this month from -30.7 in August.

The broadest indicator of future activity remained positive and rebounded this month,
suggesting that recent declines are not expected to continue over the next six months. The future general activity index increased to 21.4 in September from 1.4 in August.

Special Questions: Expectations for Production

  • Forty-one percent of participants answering the special questions said they expect production to be lower in the third quarter compared with the second quarter.
  • At the same time, 41 percent expect production to be higher in the third quarter.
  • Forty-nine percent expect to see a deceleration of production at their plants in the fourth quarter from the third quarter.

Labor Market

  • Firms' responses suggest a slight improvement in hiring this month compared
    with August. The current employment index increased 11 points to 5.8, after recording its first negative reading in 12 months in August.
  • However, the employee workweek index remained negative. The percentage of firms reporting a shorter workweek (23 percent) was greater than the percentage reporting a longer one (9 percent). The workweek index edged up to -13.7 this month from -14.4 in August.


  • The prices received index, which was -9.0 in August (its first negative reading in nine months), increased to just above zero this month. The majority of firms (62 percent) reported steady prices for their own products in September.
  • Increasing costs were somewhat more widespread this month compared to last month. Nearly 29 percent of firms reported paying higher prices for inputs this month. Only 6 percent reported lower prices. The prices paid diffusion index increased 10 points, its first one-month increase in seven 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 next Business Outlook Survey will be released at 10 a.m., Thursday, October 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 and savings and loan 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. (61 KB)

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