Manufacturing is gaining even more strength in parts of the Northeast and the Philadelphia area, according to a June 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 an already strong 15.4 for May, the manufacturing sector defied analyst expectations of a slower growth reading (13.0), and instead jumped an additional 2.4 points to reach 17.8. The Philly Fed hasn't reported numbers these high since last October.
Dissecting the index into components, growth was in all the right places. The all-important new orders component increased 6.3 points to reach 16.8, its fourth straight positive reading. Shipments added on 1.3 points to clock in at 15.5, also its fourth consecutive above-zero reading. Inventories shrunk at a faster rate (down 6.2 points to -6.7), but that could be at least partly a result of unexpectedly strong shipments.
Looking ahead, optimism remains. The survey's future conditions (six months from now) index jumped a whopping 14.6 points to 52.0. New orders made especially major gains, soaring from an already-strong 36.5 to reach 57.8.
After Monday's unexpectedly solid New York manufacturing report, these latest numbers tell bullish investors exactly what they had hoped to hear: regional manufacturing growth isn't only for New York.