Philadelphia-area factory index rises to 11-month high
The manufacturing industry in the Philadelphia region received another round of positive news, as the factory index for the area expanded in March at the fastest pace in almost a year, Bloomberg reported.
According to the news outlet, employment at manufacturing facilities also grew, highlighting increased confidence among business owners in the sector and an increased demand for goods.
The Federal Reserve Bank of Phialdelphia's general economic index increased to 12.5 for March, a significant rise from the 10.2 that was recorded for February. Economists had predicted that this gauge would rise to 12, and any readings above zero signal expansion in the area that covers eastern Pennsylvania, southern New Jersey and Delaware.
The total range for estimates for the 59 economists surveyed by Bloomberg ranged from 6 to 18.5, as each expert noted that further expansion of the state's industry would occur.
The news outlet reported that manufacturers are positioned to continue expanding as companies in the sector have rebuilt their stockpiles and invested in new equipment, positively affecting business strategy. Gains in the labor market could help to bolster consumer spending, the largest section of the economy, and something that could further contribute to the rise of the industry.
"Manufacturing has been leading the economy in recent quarters," Stuart Hoffman, chief economist at PNC Financial Services Group Inc., said before the report. "Exports bear watching given the troubles in Europe."
Reuters reported that one negative measure emerged from the index, as the gauge of new orders declined to 3.3 from 11.70, but this news was offset by the rise in employment in the sector to 6.8 from 1.10.
According to the news outlet, this data is seen as one of the first monthly indicators of the health of the country's manufacturing sector, as it comes prior to the national report given by the Institute for Supply Management.
The Philadelphia Fed surveys roughly 100 manufacturers for the index in eastern Pennsylvania, Delaware and southern New Jersey, and the findings represent an overall trend for the region.
MarketWatch reported that the index showed more than 59 percent of the companies surveyed expect production to pick up in the second quarter, compared with only 23 percent that expect a decrease. Along with this expected rise, a total of 33 percent of the businesses expect hiring to increase, compared with only 11 percent that see a drop occurring.