Manufacturers in Philadelphia, New Jersey Report Weaker June

June 20, 2011
Key index of manufacturing activity hits lowest level in 31 months.

Manufacturing activity in Philadelphia, southern New Jersey and Delaware weakened in June, according to respondents to the Federal Reserve Bank of Philadelphia's monthly Business Outlook Survey.

The survey's broadest measure of manufacturing conditions -- the diffusion index of current activity -- decreased from 3.9 in May to minus 7.7, its first negative reading since last September and its lowest reading in 31 months, according to the Philadelphia Federal Reserve Bank.

The survey's indicators for activity and new orders turned negative this month, while indicators for shipments and employment fell but remained slightly positive.

Responses to the monthly survey, which has been conducted since 1968, suggested little overall improvement in the labor market this month.

The current employment index remained positive for the ninth consecutive month, but only 14% of the firms reported an increase in employment, while 10% reported a decline, according to the bank.

Among other highlights:

  • Forty-seven percent of the companies indicated they had increased base prices since the beginning of the year, although 54% said they have been unable to pass on cost increases.
  • Nineteen percent have instituted surcharges, and 14% have price-escalation clauses covering cost increases.
  • Respondents also indicated that a large percentage of their suppliers have instituted surcharges covering recent cost increases: Seventy-one percent of the firms reported surcharges for transportation, 36% for commodities and 36% for energy.
Thirty-seven percent of the companies reported higher prices for inputs this month, while 10% reported a decline. Meanwhile, 17% of respondents reported higher prices for their own goods in June, while 12% reported price reductions.
About the Author

Josh Cable | Former Senior Editor

Former Senior Editor Josh Cable covered innovation issues -- including trends and best practices in R&D, process improvement and product development. He also reported on the best practices of the most successful companies and executives in the world of transportation manufacturing, which encompasses the aerospace, automotive, rail and shipbuilding sectors. 

Josh also led the IndustryWeek Manufacturing Hall of Fame, IW’s annual tribute to the most influential executives and thought leaders in U.S. manufacturing history.

Before joining IndustryWeek, Josh was the editor-in-chief of Penton Media’s Government Product News and Government Procurement. He also was an award-winning beat reporter for several small newspapers in Northeast Ohio.

Josh received his BFA in creative writing from Bowling Green University, and continued his professional development through course-work at Ohio University and Cuyahoga Community College.

A lifelong resident of the Buckeye State, Josh currently lives in the Tremont neighborhood of Cleveland. When the weather cooperates, you’ll find him riding his bike to work, exercising his green thumb in the backyard or playing ultimate Frisbee.  

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