US: Philadelphia Fed Manufacturing Index improves to -10.4 in May vs -19.8 expected

Manufacturing activity in the region continued to decline overall, according to the firms responding to the May Manufacturing Business Outlook Survey. The survey’s indicators for general activity, new orders, and shipments rose from last month but remained negative. 

The indexes for new orders and shipments both increased for the second consecutive month but remained negative. The index for current new orders rose 14 points to -8.9, and the current shipments index edged up 3 points to -4.7.  

On balance, the firms also reported a decline in employment. The price indexes remained below long-run averages, with the prices received index declining further. The survey’s future indexes continued to reflect muted expectations for growth over the next six months.

The employment index fell from -0.2 to -8.6, the index’s third consecutive negative reading. Over 15 percent of the firms reported a decrease in employment, and 7 percent reported an increase; most firms (76 percent) reported no change. The average workweek index was little changed at ‑7.7.

The prices paid diffusion index ticked up 3 points to 10.9, after reaching a near three-year low last month. Over one-quarter of the firms reported increases in input prices, and 15 percent reported decreases; 59 percent reported no change. The current prices received index fell 4 points to -7.0, its fourth consecutive decline and lowest reading since April 2020.

The diffusion index for future general activity declined 9 points to -10.3, the index’s third consecutive negative reading.