Monthly Data Shows Fall In Mid-Atlantic Manufacturing

Date: September 21, 2015

Philadelphia Fed Business Activity Index Falls For September

According to the latest monthly data from the Philadelphia Federal Reserve, in September the organization’s index of business activity for the mid-Atlantic region, which measures manufacturing activity, fell from 8.3 in August to -6.0 in September. Any negative number is an indication of a contraction of the market, while a positive number indicates expansion. This is the first overall negative monthly result for the index since February 2014, and was well below the positive reading of 6.0 anticipated by economists in a Reuters poll. However, Reuters noted that subindexes for the month painted a more nuanced portrait of manufacturing. New orders rose in September to 9.4 from 5.8 in August, and the employment index was up to 10.2 in September from 5.3 in August, suggesting healthy levels of activity from the sector. Meanwhile, the prices paid fell to 0.5 in September compared to 6.2 in August, indicating lower costs for manufacturers.

According to an assessment of the monthly results published in the Wall Street Journal the Philadelphia Fed said, “Evidence suggests that the responses regarding general activity that were received earlier in the month may have been negatively affected by the volatility in the stock market and international news reports.” CRT Capital’s Ian Lyngen said the results offered “a mixed report with a weaker headline but better details.” Still, the Journal noted that the overall index has been falling every month since June, when it rose to its top level of the year, 15.2.

What This Means For Small Businesses

Although the headline of this month’s manufacturing report is negative, one survey isn’t a full picture of the economic health of the US as a whole. Further, the subindexes for the month continued positive momentum, suggesting that the manufacturing sector is continuing to grow. Overall, the news for small businesses working within the manufacturing sector appears positive.

Additional Reading

NFIB previously noted monthly manufacturing activity results.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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