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For release: 10 a.m., October 16, 2008
Contact: Marilyn Wimp, lead media advisor, (215) 574-4197
Philadelphia, Pa. - Conditions in the region's manufacturing sector deteriorated significantly this month, according to firms polled for October's Business Outlook Survey. The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 3.8 in September to -37.5 this month. In special questions, the firms were asked about their access to credit and how it has affected the levels of their own production or inventories. They were also asked if the recent changes in financial conditions have led them to revise their plans for spending on new plant or equipment over the next six to 12 months.
Philadelphia Federal Reserve Senior Economic Analyst Mike Trebing summarized the survey:
“Indicators from our Business Outlook Survey suggest that conditions in the region's manufacturing sector deteriorated significantly this month. All of the survey's broad indicators—general activity, new orders, shipments, and employment—were negative and significantly lower than in September. Cost pressures, which have been prevalent since the beginning of the year, were considerably less widespread this month, and fewer firms reported increases in the prices of their own manufactured goods. In response to special questions, about one-fifth of the firms reported adverse effects of credit problems on production or inventories. Most of the survey's indicators of future activity also fell sharply this month and suggest that the region's manufacturing executives expect no growth over the next six months.”
This survey, which was started in 1968, gathers information on the manufacturing industry in the Third Federal Reserve District covering eastern Pennsylvania, southern New Jersey, and Delaware. Participation in the survey is limited to manufacturing firms with plants in the area with more than 100 employees. The survey asks about the current pace of business in the participants' plants and their future expectations of business.
To arrange an interview, contact Katherine Q. Dibling, the Bank's lead media advisor, at (215) 574-4197. The next survey will be released at 10 a.m., Thursday, November 20, 2008, and will be made available on our website, and over Businesswire. The aggregate historical data series is also available on the Bank's website.