Expansion Pace of Manufacturing Activity in Philly Fed's District Accelerates in April

By Xavier Fontdegloria

Growth of manufacturing activity in the Philadelphia area accelerated in April to its highest point in nearly 50 years, data from a report released by the Federal Reserve Bank of Philadelphia showed Thursday.

The index for current general activity stood at 50.2 in April, up from a downwardly revised 44.5 in March. The reading is above economists' forecasts in a The Wall Street Journal poll, which expected it to come in at 42.0.

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 and in various other measures at their plants on a monthly basis.

The index signals that overall manufacturing activity in the region continued to expand in April for the eleventh straight month, growing at the fastest pace since April 1973.

In April, 59% of firms reported increases in overall activity, while only 8% reported decreases.

The survey's indicators for general activity, shipments, and employment all rose. Respondents continued to report increases in prices.

The new orders index edged down two points to 36.0 in April, while the shipments index increased three points to 25.3.

The employment index increased to 30.8 in April from a revised reading of 27.4 in March, its highest recorded reading, suggesting that firms continued to add to their payrolls. More than 35% of the responding firms reported increases in employment, while only 4% reported decreases.

Respondents continued to report price pressures from purchased inputs. The prices paid index edged down four points to 69.1 in April after reaching a 40-year high in March.

Firms also reported overall increases in prices for their own manufactured goods, with the prices received index increasing four points to 34.5.

The survey's indicators for future general activity showed that manufacturing firms in the area remain optimistic about near-term growth.

The diffusion index for general activity over the next six months rose eight points to 66.6, its highest reading since October 1991. The future new orders index, shipments and employment indexes all rose sharply.

Write to Xavier Fontdegloria at [e-mail]

(END) Dow Jones Newswires

04-15-21 0911ET