Philadelphia-Area Manufacturing Weakens for 4th Month in a Row
PHILADELPHIA - Manufacturing activity weakened during November in the Philadelphia area, the Federal Reserve Bank said in its monthly survey of regional conditions.
Most survey respondents reported no change in the month. But the bank's diffusion index - the difference between the percentage of manufacturers who said activity increased and the percentage who said it decreased, fell 4.5 points in November.
It was the fourth consecutive monthly decline.
"Consistent with weakening activity, those polled also report downward pressure on prices of manufactured goods," the Fed report said. "Despite an apparent slackening of demand, however, survey respondents remain optimistic that business conditions will improve over the next six months."
"Twenty-four percent of those polled in November indicate a decline in general activity, compared with just 11% reporting declining activity in September," the survey said. It added that the factory labor market is weak.
About 23% of employers had cut jobs since October; 13% reported hiring. In 11 of the past 12 months, the number of reporting firms that were reducing jobs in the region has exceeded those increasing jobs.
"Consistent with the weakness in manufacturing activity, the diffusion index of new orders has been declining since August," the survey said.
While 45% of companies saw no change in new orders, almost 29% reported declines and only 25% saw increases. By contrast, for August and September, the percentages of companies that reported increases in new orders were 47% and 29%, respectively.
Regarding prices, although the manufacturing output price diffusion index has been negative since November 1990, "the number of reporters indicating price declines has grown in the past two months," the bank stated.