Manufacturing is making progress, according to a Philadelphia Federal Reserve Business Outlook Survey released (link opens a PDF) today. After heading to red with a -5.2 reading in May, June's activity index clocks in at 12.5, its highest rating since April 2011.
Of those businesses surveyed, 34% indicated increased activity, compared to 22% recording contractions. The index's new orders component posted a turnaround from -7.9 to 16.6, an metric also pointed to as a sign of optimism in today's Markit report.
But just like the Markit report, employment painted a dark spot on manufacturers' business decisions in the Philadelphia Fed report. Despite a 3-point increase, labor market conditions remain in the red at -5.4.
Looking ahead, expectations are optimistic. 45% of respondents expect manufacturing activity to increase over the next six months, compared to just 12% predicting contractions. And as a nod to the labor market's potential, the future employment index also increased a substantial 17 points.
The Business Outlook Survey is a monthly survey of manufacturers in the Third Federal Reserve District, which covers eastern Pennsylvania, southern New Jersey, and Delaware. Participants indicate the direction of change in overall business activity and in the various measures of activity at their plants: employment, working hours, new and unfilled orders, shipments, inventories, delivery times, prices paid, and prices received. The survey has been conducted each month since May 1968.