Philadelphia-area manufacturing activity saw continued growth in the month of February, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday, although the pace of growth slowed from the previous month.
The Philly Fed said its diffusion index for current activity dipped to 23.1 in February from 26.5 in January, but a positive reading still indicates growth in regional manufacturing activity. Economists had expected the index to drop to 20.0.
The decrease by the headline index was partly due to a slowdown in the pace of growth in new orders, as the new orders index slumped to 23.4 in February from 30.0 in January.
The shipments index also edged down to 21.5 in February from 22.7 in January, indicating a modest slowdown in the pace of growth.
On the other hand, the report said the number of employees index climbed to 25.3 in February from 22.5 in January, suggesting faster job growth.
The prices paid index also jumped to 54.4 in February from 45.4 in January, while the prices received index plunged to 16.7 from 36.6.
Looking ahead, the Philly Fed said most future indexes moderated this month but continue to indicate that firms expect growth over the next six months.
The diffusion index for future general activity tumbled to 39.5 in February after jumping to 52.8 in the previous month.
“Overall, we expect healthy goods demand, inventory restocking, rebounding business investment and another round of pandemic relief to keep manufacturing activity well-supported in 2021,” Oren Klachkin, Lead U.S. Economist at Oxford Economics.
On Tuesday, the New York Fed released a separate report showing New York manufacturing activity grew at its fastest pace in months in February.
The New York Fed said its general business conditions index jumped to 12.1 in February from 3.5 in January, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to 6.0.
With the much bigger than expected increase, the general business conditions index reached its highest level since hitting 17.0 last September.
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