Input Stories

In July, Philadelphia’s regional manufacturing activity expanded into positive territory. At 15.9, the index for current general business activity recorded its first positive reading after three months of negative readings. Just 15.8% of firms reported decreased activity this month, while 31.7% saw increases in July, a substantial improvement from the 24.5% reporting increases in June. The indexes for new orders and shipments both improved, rising from 2.3 to 18.4 and from 8.3 to 23.7, respectively. These readings are the highest recorded for these two indexes since February. Meanwhile, employment also turned positive, gaining nearly 20 points and increasing to 10.3 while recovering most of the prior month’s decline.

The prices paid index jumped from 41.4 to 58.8, largely reversing last month’s decline. The prices received index also rose from 29.5 to 34.8. As has been the case for many months, the prices received index remained lower than the prices paid index, indicating manufacturers have been absorbing a portion of those higher costs paid.

Looking ahead, indicators showed expectations for future growth have perked up from the prior month. After dropping nearly 29 points in June, expectations for future general business activity ticked up more than three points to 21.5 in July. Although a lower proportion of firms (41.1%) expect increases in activity, compared to last month’s reading of 45.1%, a lower proportion of firms (19.6%) also anticipate activity will decline, compared to last month’s reading of 26.8%. Meanwhile, the future new orders index expectations rose from 22.1 to 30.0, but the future shipments index weakened from 27.9 to 23.6. The capital expenditures index rose slightly from 14.5 to 17.1. The future prices paid and future prices received indexes both edged up from 68.9 to 75.3 and from 52.5 to 59.4, respectively. Additionally, the index for future employment slipped from 24.6 to 20.1.