Manufacturing outlook up for Phila. region

Posted: June 20, 2013

Manufacturing in the Philadelphia region is looking up, according to a key survey by the Federal Reserve Bank of Philadelphia. The survey's broadest index turned positive for June, compared to a negative reading last month, the bank said Thursday.

The closely watched survey by the Philly Fed also shows that manufacturing executives in the region expect growth over the next six months.

The report seemed to have little effect on markets, as stocks fell across the board on worries that the Federal Reserve is set to pull back on stimulus.

The Philadelphia Fed survey's broadest measure, called its "diffusion index of current activity" increased to 12.5, from negative 5.2 in May. The new number is the highest reading since April 2011. A positive number indicates growth, while a negative reflects industry contraction.

Labor market conditions were a notable exception to the generally positive outlook. The survey showed continued employment weakness. Though the survey's employment index improving three points to negative 5.4, it was the third consecutive negative reading for that factor. More firms reported employment decreases than reported increases, the bank said.

In late May, the U.S. Labor Department said the unemployment rate in the Philadelphia region fell to 7.7 percent in April from 8.0 percent a year earlier - figures that were not seasonally adjusted.

About half of firms told the Philly Fed this month that they expect to increase production over the next six months - while a similar number said they did not expect to do so, according to the bank.    - Reid Kanaley

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