Explore This Section

Firms Continue to Report Weak Business Conditions

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

Manufacturing firms responding to the Business Outlook Survey continued to report weak business conditions in July. The survey’s diffusion index of current activity increased to −12.9 from a reading of −16.6 in June, marking the third consecutive negative reading for the index.

In addition to the index of general activity, indexes for new orders and shipments also improved from June, yet all remained negative this month, suggesting overall declines in business activity. Firms reported declines in employment and shorter work hours this month. The manufacturers reported near-steady input and output prices in July. The survey’s indicators of activity over the next six months remained positive but moderated somewhat from June.

In the special questions this month, firms were asked about recent demand for their own goods and to characterize reasons for slowing. They were also asked to forecast production in the third quarter compared to the second quarter.

Special Questions

  • Almost 37 percent of firms reported decreased demand for their manufactured products in the past two months.
  • Just over 30 percent of firms saw increased demand for products.
  • Most frequently cited reasons for slowing included uncertainty about the economy (65 percent) and uncertainty about future tax rates and government regulations (52 percent).
  • Nearly 22 percent of the firms expect decreases in production of greater than 4 percent.
  • Twelve percent expect increases of greater than 4 percent.

Labor Market

  • Firms’ responses suggest decreased employment and fewer hours worked this month.
  • The current employment index decreased 10 points to -8.4.
  • Eighteen percent of the firms reported a decrease in employment; 10 percent reported increases.
  • The average workweek index increased 2 points, yet remained negative for the fourth consecutive month.


  • Sixty-five percent of the firms reported steady input prices this month, and the 19 percent reporting higher prices was nearly offset by the 15 percent reporting declines.
  • Firms also reported near-steady prices received for their own products. Seventy-six percent of firms reported steady prices, while 13 percent reported an increase and 11 percent reported a decrease.

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, August 16, 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. (64 KB)

Connect With Us

Media Contacts

Daneil Mazone E-mail
Manager, Media Relations
(215) 574-7163
(267) 535-1808 (cell)

Joey Lee E-mail
Media Relations Representative
(215) 574-3840
(215) 983-6820 (cell)