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Firms See Expansion in Manufacturing Activity

For immediate release
Contact: Katherine Dibling, E-mail Public Affairs Specialist, (215) 574-4119

Responses from manufacturing firms polled for the Federal Reserve Bank of Philadelphia’s Business Outlook Survey suggest that regional manufacturing activity continued to expand in February. The general activity index, the survey’s broadest measure of manufacturing conditions, increased to 10.2 this month from 7.3 in January.

The survey’s indicators for new orders and shipments also increased from their readings in January. Firms reported near-steady employment levels but an increase in average work hours. The survey’s indicators of future activity fell below those of recent months but continue to reflect optimism.

Special Questions: Plans for Capital Spending in 2012

  • Nearly 36 percent of the firms indicated that total capital spending would be higher this year than in 2011; 23 percent indicated that spending would be lower.
  • Firms that plan to increase capital spending noted that they expect to spend more on noncomputer equipment, software, and computer hardware.
  • Those respondents who plan to increase capital spending most frequently cited expected high sales growth, the need for replacement capital, and an improved cash flow or balance-sheet position as the reasons.

Labor Market

  • Firms’ responses suggest near-steady levels of employment this month. The current employment index fell from a reading of 11.6 in January to 1.1 this month, suggesting little overall growth in employment.
  • The percentage of firms reporting an increase in employment (14 percent) was only slighter greater than the percentage reporting decreases (13 percent).
  • Firms reporting a longer workweek (20 percent) outnumbered those reporting a shorter one (10 percent), and the current workweek index increased 5 points.


  • Indexes for prices paid and prices received both increased this month.
  • Forty-two percent of the firms reported higher prices for inputs this month, up from 35 percent last month. The prices paid index increased 7 points and has now edged higher for four consecutive months.
  • On balance, firms also reported a rise in prices for manufactured goods: More firms reported increases in prices (22 percent) than reported decreases (7 percent). The prices received index increased 4 points, its fourth consecutive increase.

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, the Bank’s public affairs specialist, at (215) 574-4119. The next Business Outlook Survey will be released at 10 a.m., Thursday, March 15, 2012, and will be made available on our website and over Businesswire. External 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. (65 KB)

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