June 2021 Philly Fed Manufacturing Survey Index Little Changed

The Philly Fed Business Outlook Survey insignificantly declined.

Analyst Opinion of the Philly Fed Business Outlook Survey

Overall, this report was worse than last month as key elements declined

This is a very noisy index which readers should be reminded is sentiment-based. The Philly Fed historically is one of the more negative of all the Fed manufacturing surveys but has been more positive than the others recently.

The index moved from 31.5 to 30.7. Positive numbers indicate market expansion, negative numbers indicate contraction. The market expected (from Econoday) 25.0 to 38.7 (consensus +30.8).

Manufacturing activity in the region continued to grow, according to the firms responding to the June Manufacturing Business Outlook Survey. The survey's indicators for general activity, new orders, and shipments remained elevated, although movements were mixed. Additionally, the employment index increased, while the price indexes climbed above last month's long-term highs. Most future indicators improved, suggesting that more firms expect overall growth over the next six months.

Current Indicators Remain Elevated

The diffusion index for current general activity edged down 1 point to 30.7 this month (see Chart 1). The index for new orders decreased 10 points to a reading of 22.2. Over 36 percent of the firms reported increases in new orders this month (down from 44 percent last month), while 14 percent reported decreases (up from 11 percent). The current shipments index rose 6 points to 27.2 in June. Over 41 percent of the firms reported increases in shipments this month, while 14 percent reported decreases.

On balance, the firms continued to report increases in employment, as the employment index increased 11 points, recovering its losses from last month. The majority of responding firms (52 percent) reported steady employment levels, and the share reporting increases (39 percent) exceeded the share reporting decreases (8 percent).

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