Recent Updates

  • Korea: Housing Price Indexes (Sep)
  • Mongolia: Trade Summary (Aug)
  • Markit: Flash PMIs: Japan (Sep)
  • Vietnam: BOP (Q2)
  • Taiwan: TIER Business Outlooks (Aug)
  • more updates...

Economy in Brief

U.S. Philadelphia Fed Index Declines & Expectations Collapse in April
by Tom Moeller  April 21, 2022

• Component movement is mixed.

• Jobs rise but hours-worked fall.

• Prices paid continue to strengthen.

The Federal Reserve Bank of Philadelphia's Manufacturing Business Conditions Index declined to 17.6 during April from 27.4 in March. The decline mostly reversed the March rise from 16.0. The Action Economics Forecast Survey expected a decline to 20.6. The percentage of firms reporting improved conditions fell to 34.2% from 40.2% in March. The share reporting weaker conditions increased 16.6% from 12.7%. Responses to this month's survey were collected from April 11 through April 18.

Haver Analytics calculates an ISM-Adjusted General Business Conditions Index from five key components using the same methodology as the national ISM index. The index fell to 59.7 this month from 61.4 in March.

Performance of the subindexes was mixed. The new orders index weakened to 17.8 from 25.8. The shipments series fell to 19.1 from 30.2, while the unfilled orders measure dropped to 5.7 from 21.0. The delivery times reading slid to 17.9 from 39.7. The average workweek measure eased to 20.8 from 21.4.

To the upside, the inventory series increased to 11.9 from 0.5 in March. Also rising was the employment measure to a record 41.4 from 38.9. A slightly lessened 42.2% of respondents raised employment versus 43.7% in March who did so, but a minimal 0.7% cut payroll sizes after 4.8% did in March.

Inflation pressures increased. The prices paid reading strengthened to a near-record 84.6 in April from 81.0 in March. A slightly lessened 85.1% of respondents reported paying higher prices while only 0.5% reported paying lower prices. The prices received index increased to 55.0 in April, but remained below the 62.9% reading in November.

The Philadelphia Fed also surveys expectations for business activity in the coming six months. The expectations index for future activity collapsed to 8.2 in April, the lowest reading since December 2008 when the economy was in recession. The decline in April was led by expected weaker new orders, delivery times and employment. Expected prices paid eased slightly from a near-record level in March.

The survey panel consists of 150 manufacturing companies in the third Federal Reserve District (which consists of southeastern Pennsylvania, southern New Jersey and Delaware). The diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease in activity. The ISM-adjusted figure, calculated by Haver Analytics, is the average of five diffusion indexes: new orders, shipments, employment, delivery times and inventories with equal weights. Each ISM-adjusted index is the sum of the percent responding "higher" and one-half of the percent responding "no change."

The figures from the Philadelphia Federal Reserve dating back to 1968 can be found in Haver's SURVEYS database. The expectation from the Action Economics Forecast Survey is available in AS1REPNA.

Philadelphia Fed - Manufacturing Business Outlook Survey (%, SA) Apr Mar Feb Apr'21 2021 2020 2019
General Factory Sector Business Conditions 17.6 27.4 16.0 50.2 30.5 7.9 9.9
ISM-Adjusted Business Conditions 59.7 61.4 58.5 63.0 61.4 52.3 55.5
  New Orders 17.8 25.8 14.2 36.0 27.2 8.9 14.1
  Shipments 19.1 30.2 13.4 25.3 24.9 9.7 16.9
  Unfilled Orders 5.7 21.0 15.8 27.2 19.1 0.4 7.7
  Delivery Time  17.9 39.7 23.0 27.8 29.3 5.1 9.4
  Inventories 11.9 0.5 4.0 17.3 12.6 -0.2 5.1
  Number of Employees 41.4 38.9 32.3 30.8 28.2 5.0 16.9
  Average Workweek 20.8 21.4 10.8 29.8 27.9 4.4 9.8
  Prices Paid 84.6 81.0 69.3 69.1 68.9 16.6 19.7
Expectations - General Business Conditions; Six Months Ahead 8.2 22.7 28.1 66.6 42.7 46.3 28.4
close
large image