Philadelphia Fed Releases April Business Outlook Survey

Apr 19, 2001, 01:00 ET from Federal Reserve Bank of Philadelphia

    PHILADELPHIA, April 19 /PRNewswire/ -- Federal Reserve Bank of
 Philadelphia today issued the following:
 
     April 2001
     The region's manufacturing firms report continued weakness in business
 activity this month.  Although most indicators of current performance improved
 from their readings in the previous month, they still suggest overall declines
 in business.  Factory employment and average work hours declined again this
 month. The firms remain relatively optimistic, however, that business will
 recover from current depressed levels over the next six months.
 
     Manufacturing Remains Weak
     For the fifth consecutive month, a larger percentage of firms reported
 declines in business activity (34 percent) than reported increases
 (27 percent).  Although the current activity index suggests continued
 deterioration in manufacturing business, it increased from -23.5 in March
 to -7.2 this month (see Chart).
     The demand for manufactured goods remains weak: the percentage of firms
 indicating declines in new orders (34 percent) was larger than the percentage
 indicating increases (30 percent).  The current new orders index, at -3.9,
 changed little from its reading of -3.1 in the previous month but is more than
 20 points higher than its average reading in January and February.  Shipments
 improved slightly: the index increased from -3.6 in March to 1.3 this month.
 The percentage of firms reporting increases in shipments (31 percent) was
 nearly the same as the percentage reporting declines (30 percent).  Although
 readings for unfilled orders and delivery times rose somewhat, they remain
 weak.  The unfilled orders index increased only slightly, from -19.2 in March
 to -18.9 this month, and the delivery times index increased from -22.0 to
 -15.7.  Firms continue to reduce inventories; the current inventories index
 stands at -16.6 this month, up from -22.0 in March.
     Firms report weaker manufacturing employment this month.  The diffusion
 index of current employment fell from -6.3 in March to -12.9 and has remained
 negative for six consecutive months.  The percentage of firms reporting
 declines in employment (29 percent) exceeded the percentage reporting
 increases (16 percent).  The average workweek also declined: the current
 workweek index fell from -13.2 to -28.0.
 
     Upward Price Pressures Diminish
     Eighteen percent of the firms surveyed reported price increases for
 inputs, but nearly 11 percent reported decreases this month.  The current
 prices paid index suggests continued moderation of input price pressures: the
 index declined from 15.2 to 7.0, its lowest reading since May 1999.
     With regard to their own manufactured goods, the largest percentage of
 firms surveyed (nearly 74 percent) reported no change in prices this month.
 Probably reflecting overall weak conditions in the manufacturing sector, the
 percentage of firms reporting price decreases (18 percent) was greater than
 the percentage reporting increases (9 percent), and the prices received index
 fell from -3.6 in March to -8.4.
 
     Expectations Remain Optimistic
     Despite continued weakness in manufacturing, expectations regarding the
 next six months remain relatively optimistic.  More than 46 percent of firms
 expect an improvement in business conditions over the next six months,
 compared with 21 percent expecting deterioration.  The future index of general
 activity increased modestly from 20.9 in March to 25.7 in April (see Chart).
 Similar optimism is reported for future new orders and shipments.  The future
 shipments index increased from 24.0 in March to 32.0, and the future new
 orders index increased from 25.8 to 27.5.
     Firms' expectations regarding employment are also encouraging.  More than
 35 percent of the manufacturers expect increases in employment over the next
 six months, compared with 18 percent expecting decreases.  The future
 employment index increased significantly, from 0.9 to 17.8, its highest
 reading since February 2000.  Plans for capital expenditures, however,
 continue to be depressed.  The percentage of firms expecting to increase
 capital expenditures over the next six months (22 percent) is nearly the same
 as the percentage expecting to decrease (20 percent).  Despite improvement in
 the other future indicators, the future capital expenditure diffusion index
 declined from a very low reading of 3.1 in March to 1.7 and has remained at
 low levels since the beginning of the year.
 
     Summary
     Although most current indicators improved from their readings in the past
 few months, the responses suggest continued deterioration in business
 conditions.  Although declines in new orders were not as large as in the first
 two months of this year, the share of firms reporting declines is still larger
 than the share reporting increases.  Responses this month suggest a
 continuation of manufacturing job losses in the region.  Respondents suggest,
 however, that the current weakness in the manufacturing sector will not last
 long.   Most indicators of future growth, except for capital expenditures,
 showed further improvement this month.
 
     Notice for front page.
     Starting June 2001, the Business Outlook Survey will be released at
 12 noon E.T. on the third Thursday of each month instead of its current time
 of 10 a.m. E.T.  The release schedule for 2001 is available at:
 http://www.phil.frb.org/econ/bos/bosschedule.html.
 
 
       April 2001 Results
 
                              April vs. March             Six Months from
                                                           Now vs. April
 
                        Dec.  No ch.  Inc.   Index   Dec.  No ch.  Inc.  Index
 
    General Business    33.7   39.9   26.5   -7.2    20.7   22.5   46.4   25.7
     Conditions
 
    New Orders          34.1   35.8   30.2   -3.9    20.4   23.7   47.9   27.5
 
    Shipments           29.5   37.7   30.8    1.3    19.0   21.2   51.1   32.0
 
    Unfilled Orders     29.0   58.7   10.1  -18.9    21.9   51.3   19.8   -2.1
 
    Delivery Times      22.9   69.2    7.2  -15.7    20.6   66.7    6.3  -14.2
 
    Inventories         35.6   44.1   19.0  -16.6    32.4   43.7   16.4  -16.0
 
    Prices Paid         10.8   70.8   17.9    7.0     4.3   60.9   30.4   26.1
 
    Prices Received     17.5   73.5    9.1   -8.4     7.5   62.4   24.7   17.2
 
    Number of Employees 29.3   53.9   16.4  -12.9    17.5   41.7   35.3   17.8
 
    Avg. Employee
     Workweek           35.3   57.5    7.2  -28.0    21.2   51.1   20.1   -1.1
 
    Capital
     Expenditures         -       -      -      -    20.3   40.5   22.0    1.7
 
     Notes: (1) Items may not add to 100 percent because of omission by
                respondents.
            (2) All data are seasonally adjusted.
            (3) Diffusion indexes represent the percentage of respondents
                indicating an increase minus the percentage indicating a
                decrease.
            (4) Survey results reflect data received through April 10, 2001.
 
 

SOURCE Federal Reserve Bank of Philadelphia
    PHILADELPHIA, April 19 /PRNewswire/ -- Federal Reserve Bank of
 Philadelphia today issued the following:
 
     April 2001
     The region's manufacturing firms report continued weakness in business
 activity this month.  Although most indicators of current performance improved
 from their readings in the previous month, they still suggest overall declines
 in business.  Factory employment and average work hours declined again this
 month. The firms remain relatively optimistic, however, that business will
 recover from current depressed levels over the next six months.
 
     Manufacturing Remains Weak
     For the fifth consecutive month, a larger percentage of firms reported
 declines in business activity (34 percent) than reported increases
 (27 percent).  Although the current activity index suggests continued
 deterioration in manufacturing business, it increased from -23.5 in March
 to -7.2 this month (see Chart).
     The demand for manufactured goods remains weak: the percentage of firms
 indicating declines in new orders (34 percent) was larger than the percentage
 indicating increases (30 percent).  The current new orders index, at -3.9,
 changed little from its reading of -3.1 in the previous month but is more than
 20 points higher than its average reading in January and February.  Shipments
 improved slightly: the index increased from -3.6 in March to 1.3 this month.
 The percentage of firms reporting increases in shipments (31 percent) was
 nearly the same as the percentage reporting declines (30 percent).  Although
 readings for unfilled orders and delivery times rose somewhat, they remain
 weak.  The unfilled orders index increased only slightly, from -19.2 in March
 to -18.9 this month, and the delivery times index increased from -22.0 to
 -15.7.  Firms continue to reduce inventories; the current inventories index
 stands at -16.6 this month, up from -22.0 in March.
     Firms report weaker manufacturing employment this month.  The diffusion
 index of current employment fell from -6.3 in March to -12.9 and has remained
 negative for six consecutive months.  The percentage of firms reporting
 declines in employment (29 percent) exceeded the percentage reporting
 increases (16 percent).  The average workweek also declined: the current
 workweek index fell from -13.2 to -28.0.
 
     Upward Price Pressures Diminish
     Eighteen percent of the firms surveyed reported price increases for
 inputs, but nearly 11 percent reported decreases this month.  The current
 prices paid index suggests continued moderation of input price pressures: the
 index declined from 15.2 to 7.0, its lowest reading since May 1999.
     With regard to their own manufactured goods, the largest percentage of
 firms surveyed (nearly 74 percent) reported no change in prices this month.
 Probably reflecting overall weak conditions in the manufacturing sector, the
 percentage of firms reporting price decreases (18 percent) was greater than
 the percentage reporting increases (9 percent), and the prices received index
 fell from -3.6 in March to -8.4.
 
     Expectations Remain Optimistic
     Despite continued weakness in manufacturing, expectations regarding the
 next six months remain relatively optimistic.  More than 46 percent of firms
 expect an improvement in business conditions over the next six months,
 compared with 21 percent expecting deterioration.  The future index of general
 activity increased modestly from 20.9 in March to 25.7 in April (see Chart).
 Similar optimism is reported for future new orders and shipments.  The future
 shipments index increased from 24.0 in March to 32.0, and the future new
 orders index increased from 25.8 to 27.5.
     Firms' expectations regarding employment are also encouraging.  More than
 35 percent of the manufacturers expect increases in employment over the next
 six months, compared with 18 percent expecting decreases.  The future
 employment index increased significantly, from 0.9 to 17.8, its highest
 reading since February 2000.  Plans for capital expenditures, however,
 continue to be depressed.  The percentage of firms expecting to increase
 capital expenditures over the next six months (22 percent) is nearly the same
 as the percentage expecting to decrease (20 percent).  Despite improvement in
 the other future indicators, the future capital expenditure diffusion index
 declined from a very low reading of 3.1 in March to 1.7 and has remained at
 low levels since the beginning of the year.
 
     Summary
     Although most current indicators improved from their readings in the past
 few months, the responses suggest continued deterioration in business
 conditions.  Although declines in new orders were not as large as in the first
 two months of this year, the share of firms reporting declines is still larger
 than the share reporting increases.  Responses this month suggest a
 continuation of manufacturing job losses in the region.  Respondents suggest,
 however, that the current weakness in the manufacturing sector will not last
 long.   Most indicators of future growth, except for capital expenditures,
 showed further improvement this month.
 
     Notice for front page.
     Starting June 2001, the Business Outlook Survey will be released at
 12 noon E.T. on the third Thursday of each month instead of its current time
 of 10 a.m. E.T.  The release schedule for 2001 is available at:
 http://www.phil.frb.org/econ/bos/bosschedule.html.
 
 
       April 2001 Results
 
                              April vs. March             Six Months from
                                                           Now vs. April
 
                        Dec.  No ch.  Inc.   Index   Dec.  No ch.  Inc.  Index
 
    General Business    33.7   39.9   26.5   -7.2    20.7   22.5   46.4   25.7
     Conditions
 
    New Orders          34.1   35.8   30.2   -3.9    20.4   23.7   47.9   27.5
 
    Shipments           29.5   37.7   30.8    1.3    19.0   21.2   51.1   32.0
 
    Unfilled Orders     29.0   58.7   10.1  -18.9    21.9   51.3   19.8   -2.1
 
    Delivery Times      22.9   69.2    7.2  -15.7    20.6   66.7    6.3  -14.2
 
    Inventories         35.6   44.1   19.0  -16.6    32.4   43.7   16.4  -16.0
 
    Prices Paid         10.8   70.8   17.9    7.0     4.3   60.9   30.4   26.1
 
    Prices Received     17.5   73.5    9.1   -8.4     7.5   62.4   24.7   17.2
 
    Number of Employees 29.3   53.9   16.4  -12.9    17.5   41.7   35.3   17.8
 
    Avg. Employee
     Workweek           35.3   57.5    7.2  -28.0    21.2   51.1   20.1   -1.1
 
    Capital
     Expenditures         -       -      -      -    20.3   40.5   22.0    1.7
 
     Notes: (1) Items may not add to 100 percent because of omission by
                respondents.
            (2) All data are seasonally adjusted.
            (3) Diffusion indexes represent the percentage of respondents
                indicating an increase minus the percentage indicating a
                decrease.
            (4) Survey results reflect data received through April 10, 2001.
 
 SOURCE  Federal Reserve Bank of Philadelphia