U.S. Federal Reserve Bank of Philadelphia reported improved regional manufacturing conditions in July.
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The diffusion index for current general activity more than recovered from its decline last month, increasing from 0.3 in June to 21.8 this month. The indexes for current shipments and new orders also improved this month. The current new orders index increased 11 points, while the shipments index increased 8 points, according to its July Manufacturing Business Outlook Survey.
The survey showed that the firms reported increases in manufacturing employment and longer workweeks this month. The current employment index increased 15 points to 30.0, its highest reading since October 2017. The average workweek index also increased 16 points, hitting its highest reading in 14 months.
The prices paid and prices received indexes both increased this month but remained well below their readings over the past few years. The current prices received index, reflecting the manufacturers' own prices, increased 9 points to a reading of 9.5. The prices paid diffusion index increased 3 points to 16.1.
The diffusion index for future general activity increased 17 points to its highest reading since May 2018. Nearly 53 percent of the firms expect increases in activity over the next six months, while 15 percent expect declines. The future new orders index increased 14 points, while the future shipments index was unchanged from an elevated reading.
The firms remained optimistic overall about hiring over the next six months. Although the future employment index decreased 2 points, 34 percent of the firms expect higher employment over the next six months. The future capital spending index improved 9 points this month to a reading of 36.9, its highest reading in 17 months.
The Manufacturing Business Outlook Survey is a monthly survey of manufacturers in the Third Federal Reserve District covering eastern Pennsylvania, southern New Jersey, and Delaware.
Participants indicate the direction of change in overall business activity and in the various measures of activity at their plants.
Federal Reserve Bank of Philadelphia is one of the 12 regional Federal Reserve Banks that, together with the Board of Governors based in Washington, D.C., make up the Federal Reserve System. ■