Input Stories

In May, Philadelphia’s regional manufacturing activity remained weak. The index for current general business activity rose but remained negative, increasing from -26.4 to -4.0. Twenty-three percent of firms reported decreased activity this month, while 19.0% saw increases in May, an improvement from the 12.5% reporting increases in April. The index for new orders recovered from a sharp decline last month, rising from -34.2 to 7.5. On the other hand, the shipments index continued to fall, dropping 3.9 points to -13.0. Meanwhile, employment and the average employee workweek rose in May, to 16.5 and 2.0, respectively.

The prices paid index edged up from 51.0 to 59.8, the highest reading since June 2022, while the prices received index increased from 30.7 to 43.6. As has been the case for many months, the prices received index remains lower than the prices paid index, indicating manufacturers have been absorbing a sizable portion of those higher costs paid.

Looking ahead, indicators showed growing optimism about the future after two months of gloomy readings. The index for future general business activity soared more than 40 points to 47.2 in May. Compared to the previous month, a lower proportion of firms (20.2%) expect decreases in activity, compared to last month’s reading of 29.0%, while 67.3% anticipate activity will improve. Similarly, the future new orders index surged from 6.6 to 49.7, and the future shipments index rocketed from 5.0 to 51.1. Meanwhile, the index for future employment turned positive, rising from -0.6 to 23.0. The capital expenditures index improved from 2.0 to 27.0. The future prices paid index edged down from 63.1 to 61.6, while the future prices received index fell from 67.7 to 50.0, indicating manufacturers’ concerns about future costs are easing slightly.