The Philly Fed Business Outlook Survey declined by remains in expansion. Key elements are in expansion but improved.

Analyst Opinion of the Philly Fed Business Outllook Survey

Consider this a stronger report than last month because of the improvement of the key internals.

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 then the others recently.

The index moved from +27.9 to 22.7. Positive numbers indicate market expansion, negative numbers indicate contraction. The market expected (from Bloomberg / Econoday) 23.0 to 26.5 (consensus +25.0).

Regional manufacturing activity continued to expand in November, according to results from this month’s Manufacturing Business Outlook Survey. The indexes for general activity and shipments fell from their October readings but remained positive, while the survey’s index for new orders rose. The employment index fell but remained elevated. Almost all of the future indicators rose, and firms continue to expect growth in both activity and employment over the next six months.

Current Activity Continues to Expand

The diffusion index for current manufacturing activity in the region remained positive but decreased from a reading of 27.9 in October to 22.7 in November (see Chart). The index has been positive for 16 consecutive months. Nearly 35 percent of the firms indicated increases in activity this month, down slightly from October. The shipments index fell 3 points to 21.7, while the new orders index rose 2 points to 21.4. Both the delivery times and unfilled orders indexes remained positive, suggesting longer delivery times and increases in unfilled orders. In addition, the inventories index turned negative, falling 15 points to -8.6.

Firms continued to report increases in employment, though at a slower pace relative to last month. While the current employment index has been positive for 12 consecutive months, it fell 8 points to 22.6 in November. Almost 28 percent of the responding firms reported increases in employment, while 5 percent of the firms reported decreases. The average workweek index also fell, dropping 6 points to 13.7. This index has been positive for 13 consecutive months.