Philadelphia Fed Manufacturing Index Rises to Highest Level Since April 2021
August 24, 2026
In August, Philadelphia’s regional manufacturing activity expanded to its highest level since April 2021, with the index for general business activity climbing from 41.4 to 47.4. This month, 56.9% reported increases, while 9.6% reported decreases. New orders declined, moving down from 37.0 to 30.1, while shipments decreased from 33.7 to 27.7. Meanwhile, employment improved to its highest level since April 2022, jumping 17.9 points to 27.9, and the average workweek grew 12.5 points to 26.5.
The prices paid and prices received indices both declined in August, moving from 53.9 to 40.9 and from 27.4 to 17.7, respectively. As has been the case for many months, the prices received index remained lower than the prices paid index, indicating that manufacturers have been absorbing a portion of higher costs paid.
Looking ahead, most indicators showing expectations for growth improved in August. After falling 15.8 points in July, expectations for future business activity surged 39.2 points to 73.6 in August, the highest level since August 1983. The gain came from a jump in the proportion of firms expecting an increase in activity (74.5%). At the same time, the number of firms anticipating a decrease in activity (0.9%) fell in August. The future new orders index rose from 35.1 to 66.0, and the future shipments index moved up from 39.3 to 63.5. Meanwhile, the capital expenditures index jumped from 30.1 to 48.2, its highest reading in 53 years. The future prices paid and prices received indices both increased, moving from 56.7 to 62.9 and from 41.4 to 59.8, respectively, with both indices remaining above their long-run averages. Additionally, the index for future employment improved from 29.5 to 35.4.
In August, firms were asked about changes in customer price sensitivity and anticipated cost changes. Of those responses, 37.5% reported customers were more price sensitive since last quarter, while 58% noted customer price sensitivity was unchanged and 4.2% estimated they were less price sensitive. Looking forward, 43.5% anticipated changes to industry costs in the near term, down from 48% last quarter. Further, 80% expected competitors to raise prices in response, while 20% anticipated competitors would keep prices the same and none predicted a decline in prices.
