Philly Fed Manufacturing Survey Remains Deeply Depressed, in Contraction for Seventh Straight Months

Empty retail space on Bond Street on 9th March 2023 in London, United Kingdom. Things have
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Manufacturing activity in the Philadelphia area declined again in March, the Federal Reserve Bank of Philadelphia said on Thursday.

The Philly Fed said that its index for current general activity rose one point to a minus 23.2, the seventh consecutive negative reading. While that is an improvement from the minus reading of 24.3 in February, any reading below zero indicates a contraction in activity from the previous month.

Economists had forecast the index to come in at minus 15.8, so the reading is worse than expected.

Both the index of new orders, a critical metric of demand for manufactured goods in the region, and the index measuring shipments have declined to their lowest readings since May 2020, when much of the economy was locked down in the initial wave of the pandemic. The index of new orders fell 15 points to minus 28.2. Only 35 percent of the firms reported declines in new orders, unchanged since last month, seven percent reported increases, and 58 percent reported no change.

The shipments index had a sharp drop, going from 8.7 last month to a minus 25.4 this month.

The Philly Fed’s report follows the Empire State survey released by the New York Fed on Wednesday. That index showed that business activity in New York State has continued to decline. The general business conditions index fell roughly 19 points to -24.6 from -5.8 in January. The new orders and shipments also saw a significant decline, with new orders dropping 14 points to -21.7 and shipments dropping approximately 14 points to a minus 13.4.

Manufacturers in the Philadelphia area do not expect much improvement in the months ahead. Indeed, their outlook turned less optimistic in March compared with February.

“Most future indicators weakened, suggesting that the firms continue to have tempered expectations for growth over the next six months,” the Philly Fed said in its monthly Manufacturing Business Outlook Survey.

The survey’s forward-looking indexes showed a decline in the new orders index by five points, but remained positive at 4.6, while the index of future shipments increased from 4.6 to 7.8. Additionally, the index of future employment ticked down one point to 6.9, while the index of future prices paid rose by nine points to 26.8. And the index of future capital expenditures also decreased from  7.5 to minus 3.8 — the first negative reading on the index since September 2009.

The Philly Fed manufacturing index is based on surveys of manufacturing firms in the Third Federal Reserve District, which covers eastern Pennsylvania, southern New Jersey, and Delaware.

Jacob Bliss is a reporter for Breitbart News. Write to him at or follow him on Twitter @JacobMBliss.


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