Manufacturing data shows expansion in Philadelphia area
The Federal Reserve Bank of Philadelphia's general economic index increased to 10.3 in December. This marked a rise from the 3.6 that was recorded for last month, according to Bloomberg.
The news source reported that readings greater than zero indicated expansion occurred in the area covering eastern Pennsylvania, Delaware and southern New Jersey. This number represented the fastest pace of growth in eight months, as orders picked up around the region.
Economists surveyed by Bloomberg had initially projected that the gauge would increase to 5, as this number represented the median of 57 estimates.
According to the news source, the report also indicated the Philadelphia Fed's new orders measure climbed to 9.7, also representing the highest level that has been achieved since April. This number was higher than the 1.3 that was recorded last month.
Bloomberg reported that more factories had declining inventories, pushing the gauge down to the lowest level since September 2010. This may encourage a pickup in production from these facilities.
A release from the Federal Reserve Bank of Philadelphia noted that manufacturing in the region could continue to improve for December, based on the responses to the Business Outlook Survey.
The percentage of firms reporting increases in activity, 25 percent, exceeded the number of business that had decreases, 15 percent.
The release also noted increasing costs were more widespread for December as compared to last month. The percentage of firms reporting higher input costs increased from 31 percent in November to 41 percent this month.
The number of firms reporting price increases for their manufactured goods was higher than the number of business that reported decreases, as the margin was 22 percent to 10 percent, respectively.
According to the release, the indicators for future activity were also reported to improve for the month. The broadest measure of this pickup increased 2 points, and has now risen for four consecutive months.
This rise was mirrored by the future new orders index, which increased by a margin of 8 points.
Employment in the area among manufacturers is also expected to rise, according to the release, as the number of firms expecting to increase employment over the next six months is significantly higher than those that are expecting to decrease hirings, as this margin was 24 percent to 11 percent.
In summation, indicators for general activity among these Philadelphia firms rose and the future manufacturing growth was expected to increase.