Philadelphia Fed index shows expansion, cost pressures
Manufacturers report continued growth in March, but this month's Federal Reserve Bank of Philadelphia Report on Business also showed signs of cost pressures.
The region's manufacturing sector expanded in March, at a slower pace than in February, as the general business conditions index decreased to 22.3 from 25.8.
Economists surveyed by IFR Markets predicted a reading of 23.3 for the index.
The prices paid index was 42.6, down from 45.0 last month, new orders index surged to 35.7 from 24.5, shipments soared to 32.4 from 15.5, the unfilled orders index rose to 20.1 from 14.5, the delivery times index gained to 14.0 from 4.5, inventories reversed to positive 16.5 from negative 0.9, prices received slid to 20.7 from 23.9, the number of employees index grew to 25.6 from 25.2, and the average employee workweek dropped to 12.8 from 13.7.
“Price increases for purchased inputs were reported by 44% of the manufacturers this month,” according to the report. “The prices paid diffusion index fell 2 points to 42.6 but remains near last month’s reading, which was the highest since 2011. The current prices received index, reflecting the manufacturers own prices, declined 3 points to a reading of 20.7.”
The six months from now general business conditions index gained to 47.9 from 41.2 in last month’s survey, the prices paid index was at 62.8, down from 65.2 in the prior survey, and the prices received index rose to 51.3 from 49.5. The capital expenditures index fell to 35.9 from 40.3 last month. The number of employees index slid to 37.1 from 40.4, while the average workweek index increased to 21.8 from 14.7. The new orders index dipped to 48.8 from 49.1, shipments declined to 43.4 from 51.7; and the unfilled orders index dropped to 10.8 from 18.8. The delivery times index fell to 9.6 from 16.6, and inventories slumped to 14.3 from 27.5.