Manufacturing Activity in Philly Fed's District Accelerated in September

Growth of manufacturing activity in the Philadelphia area gathered pace in September after several months slowing down, according to a survey released Thursday by the Federal Reserve Bank of Philadelphia.

The index for current general activity climbed to 30.7 in September from 19.4 in August, above the 18.7 expected from economists' polled by The Wall Street Journal.

The survey polls manufacturers in the Third Federal Reserve District--which covers eastern Pennsylvania, southern New Jersey and Delaware--about the direction of change in overall business activity at their plants. A reading above zero indicates expansion.

The index signals that overall manufacturing activity in the region continued to expand, and its expansion pace rebounded compared with the previous two months.

U.S. factory activity keeps rising, though there is growing evidence that problems related to procuring components and raw materials are constraining output. These supply-chain shortages aren't expected to clear soon as Covid-19 still disrupts many parts of the global economy.

In September, 33% of firms in the Philly Fed's district reported increases in overall activity, while 3% reported decreases compared with the previous month.

Demand-related indicators posted mixed readings. The new orders index eased to 15.9 in September from 22.8 the previous month, while the shipments index increased to 29.9 from 18.9.

The employment index cooled to 26.3 from 32.6 the previous month, signaling increases in employment but at a slightly slower pace than in August.

The indicators for prices paid and prices received remained elevated but posted small declines. The prices paid diffusion index declined to 67.3, while the prices received index ticked down one point to 52.9. Both indices suggest widespread increases in prices.

The survey's future indexes indicate that respondents continue to expect growth over the next six months, although the future general activity and new orders indexes continued to trend lower.

The diffusion index for general activity over the next six months fell to 20.0 from 33.7 the previous month. The future new orders index and employment indexes also decreased, while the indicator gauging future shipments increased slightly.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com


  (END) Dow Jones Newswires
  09-16-21 0906ET
  Copyright (c) 2021 Dow Jones & Company, Inc.

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