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Manufacturers 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 weakness in overall business conditions in August. The survey’s diffusion index of current activity increased to -7.1 from a reading of -12.9 in July, marking the fourth consecutive negative reading for the index but also its highest reading since May.

The index for new orders also improved from July but remained negative this month. Firms reported declines in shipments and fewer hours worked this month. The survey’s indicators of activity over the next six months remained positive but moderated for the second consecutive month.

In the special questions this month, firms were asked about the importance of seasonal factors to monthly production levels. They were also asked about scheduled shutdowns and production slowdowns during the summer months.

Special Questions

  • Just over 43 percent of firms said that seasonal factors were significant in their monthly production levels in 2012, compared with 39.5 percent in 2011.
  • Almost 62 percent of firms said that seasonal factors’ importance has not changed over time.
  • Almost 67 percent of firms did not schedule a plant shutdown or production slowdown during the summer months this year.

Labor Market

  • Firms’ responses suggest decreased employment and fewer hours worked this month.
  • The current employment index remained near steady at -8.6
  • Fifteen percent of the firms reported a decrease in employment; 7 percent reported an increase.
  • The average workweek index posted its fifth consecutive negative reading.


  • Almost 59 percent of the firms reported steady input prices this month, and the 26 percent reporting higher prices was partially offset by the 15 percent reporting declines.
  • Firms also reported near-steady prices received for their own products. Almost 73 percent of firms reported steady prices, while 13 percent reported an increase and 10 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, September 20, 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. (61 KB)

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