Philadelphia Manufacturing Surges, New York Strong on Optimism

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Growth at manufacturers in the Philadelphia region and New York state and rebounded in April, reflecting stronger orders and increased shipments as the economy continues its recovery from the Covid-19 pandemic.

The Federal Reserve Bank of Philadelphia’s general activity index surged to 50.2 -- the highest since April 1973 -- from a revised 44.5 in March, according to a report Thursday. That exceeded all forecasts in a Bloomberg survey of economists whose median projection called for a reading of 41.5. Readings above zero indicate expansion.

A separate report from the Federal Reserve Bank of New York’s general business conditions index advanced at the fastest pace since 2017, rising to 26.3 from 17.4 a month earlier. The median forecast in a Bloomberg survey called for a reading of 20.

Almost 59% of Philadelphia-area firms reported increases in current activity this month, while only 8% reported decreases, the regional bank said. The index for current shipments increased, while the current employment gauge surged to 30.8, a record high.

Price Pressures

Companies continue to report price pressures from purchased inputs, according to the report. While the prices-paid index edged a little lower from March’s 40-year high to 69.1 in April, more than 71% of the firms reported higher input prices this month.

In New York state, prices paid for materials increased 10.3 points to 74.7, the highest since July 2008. Meantime, a gauge of prices received climbed to 34.9, the strongest reading in data back to 2001.

Delivery times also lengthened, with the gauge rising to a record, and unfilled orders increased to the highest since 2001 as supply chains.

As a result, factory hiring and average workweek are picking up.

The Fed bank’s report also showed the state’s manufacturers were upbeat about prospects for business activity and orders.

©2021 Bloomberg L.P.

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