Manufacturing is on the rebound in parts of the Northeast and Philadelphia area, according to a March Philadelphia Federal Reserve report (link opens as PDF) released today.
The "Philly Fed" publishes the results of a monthly survey asking regional (eastern Pennsylvania, southern New Jersey, and Delaware) manufacturing stakeholders whether certain components of manufacturing have experienced growth (positive number) or contraction (negative number). Investors watch regional manufacturing reports as a possible signal of larger economic upswings or downturns.
After clocking in at -6.3 for February, analysts had expected a turnaround to 3.0. Actual results clocked in a surprisingly strong 9.0. Weather wilted growth in February, but a sharp uptick in new orders and shipments shows that businesses are back in action.
Dissecting the index into components, new orders pulled its -5.2 February reading into growth territory at 5.7 points. Shipments made an even sharper improvement, moving from -9.9 to 5.7. Unfilled orders knocked off a negative sign, pushing up from -2.6 to 2.6, while inventories slimmed 10.4 points to -6.8.
Looking ahead, March's optimism seems as if it'll last. The survey's future conditions (six months from now) index came in at 35.4, down slightly from February's 40.2 reading, but still positive. While new orders shaved off 3.2 points to hit 32.2, shipments expanded 5.1 points to 41.1.