The results of the Philadelphia Fed’s April Business Outlook Survey are out.

The report’s headline index of manufacturing conditions in eastern Pennsylvania, southern New Jersey, and Delaware advanced to 16.6 this month from March’s 9.0 reading, well ahead of economists’ consensus forecast for a smaller rise to 10.0.

The table at right shows changes in various sub-indices of the report.

Below is the full text of the press release:

April 2014 Business Outlook Survey

Manufacturing activity in the region increased in April, according to firms responding to this month’s Business Outlook Survey. The survey’s broadest indicators for general activity, new orders, shipments, and employment all remained positive and increased from their readings in March. Price pressures remain modest. The survey’s indicators of future activity reflected optimism about continued expansion over the next six months, although the indicators have fallen from higher readings in recent months.

Indicators Signal Growth This Month

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from a reading of 9.0 in March to 16.6 this month, its highest reading since last September (see Chart). The index has now increased for two consecutive months, following the weather-influenced negative reading in February. The new orders and current shipments indexes also moved higher this month, increasing 9 points and 17 points, respectively.

Indicators suggest slightly improved labour market conditions this month. The employment index remained positive for the 10th consecutive month and increased 5 points, suggesting overall improvement. The percentage of firms reporting increases in employment (20 per cent) edged out the percentage reporting decreases (13 per cent). The workweek index was also positive for the second consecutive month, edging 2 points higher.

Price Pressures Are Relatively Moderate

The survey’s price diffusion indexes continue to suggest overall moderate rates of increase. The prices received index was unchanged at 4.3. Nearly 76 per cent of the firms reported no change in their final goods prices, and the percentage of firms reporting increases (13 per cent) was only slightly greater than the percentage reporting decreases (9 per cent). The prices paid index edged slightly lower, to 11.3, its third consecutive month of decline. Seventeen per cent of the firms reported higher input prices, down from 19 per cent in March.

Indicators for the Future Remain Positive

Firms remain optimistic about the growth of overall manufacturing activity for the next six months. The future general activity index remained positive; however, the index decreased nearly 9 points from its reading in March (see Chart). Indexes for future new orders and shipments also edged lower. The future new orders index decreased 3 points, while the future shipments index decreased 8 points. Firms’ responses about future employment continued to reflect overall confidence about future conditions. The percentage of firms expecting employment growth (27 per cent) was greater than the percentage expecting employment declines (11 per cent). The index, however, decreased 13 points, exactly reversing a 13-point increase in March.

In special questions this month, firms were asked about regional factors influencing their location decisions (see Special Questions). Firms were also asked to rank, by relevance, each factor influencing their decision to remain in the region. According to the firms’ responses, the three most reported factors influencing the decision were (1) the availability of skilled labour; (2) the cost of labour; and (3) taxes, subsidies, and regulation. About 30 per cent of the firms responding indicated that the cost of energy and the proximity to customers and distribution channels were also very or most relevant. The three most reported categories above, plus the cost of energy, were also reported to have become more important than other factors in recent years (Question 2).


The April Business Outlook Survey suggests that activity in the region’s manufacturing sector continued on a path of growth this month. Firms reported increases in overall activity, new orders, shipments, and employment this month. Price pressures remained moderate. The survey’s future activity indexes, on balance, indicate that firms expect continued growth and employment increases over the next six months.

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