Input Stories

While two of the most closely watched regional manufacturing surveys had largely different September reports, they agreed on one thing: conditions are likely to improve.

What’s going on: The Federal Reserve Bank of Philadelphia’s Manufacturing Business Outlook Survey showed overall growth in the Philadelphia region, while the Federal Reserve Bank of New York’s  Empire State Manufacturing Survey reported a modest decline in business activity in New York state. Both surveys’ responses were collected between Sept. 2 and Sept. 9.

Philadelphia: The Philadelphia survey’s indicators for current general activity, new orders and shipments all increased this month.

• The diffusion index for general activity went up nearly 24 points to 23.2, its highest reading since January, while the new orders index rose 14.3 points to 12.4 and shipments increased 21.6 points to 26.1.
• While nearly 86% of companies reported that uncertainty was at least a slight capacity utilization constraint and almost 49% of the firms reported increases in input prices, respondents expect continued growth. The diffusion index for future general activity increased 6.5 points to 31.5, its highest reading in four months.

New York: The Empire State Manufacturing Survey, meanwhile, showed a decline in the headline general business conditions index of nearly 21 points, to -8.7, its first negative reading in three months.

• The new orders index fell 35 points to -19.6, and the shipments index dropped 29.5 points to -17.3, the lowest levels for both indexes in nearly a year-and-a-half.
• The declines followed signs of growth over the summer.
• Yet companies said they expected conditions to improve in the coming months, despite also saying they foresee employment levels not to rise over the next half year. 

The NAM finds: The NAM’s Q3 Manufacturers’ Outlook Survey, released this week, also found increased levels of optimism in the industry, though the same top business concerns remain.

• Some 65.0% of respondents—up from 55.4% in Q2—said they have a positive outlook for their firms.