Manufacturing Activity Expanded Solidly in February, with Prices Accelerating Strongly

HOUSTON, Feb. 15 (Xinhua) -- The February Manufacturing Business Outlook Survey indicates continued growth in regional manufacturing this month, the Federal Reserve Bank of Philadelphia reported on Thursday.

Responses to the survey, conducted by the Federal Reserve Bank of Philadelphia which is responsible for the Third District covering eastern Pennsylvania, southern New Jersey, and Delaware, suggest that the region's manufacturing sector continues to expand in February.

The indexes for general activity, new orders, and employment were all positive this month and increased from their readings last month.

Price increases for inputs were more widespread this month, according to the respondents. The survey's future indexes, reflecting expectations for the next six months, suggest continued optimism.

The index for current manufacturing activity increased four points in February to a reading of 25.8. The index has stayed within a relatively narrow range over the past nine months.

Nearly 41 percent of the firms indicated increases in activity this month, while 15 percent reported decreases.

The demand for manufactured goods, as measured by the survey's current new orders index, showed notable improvement: The diffusion index increased 14 points, with 41 percent of the firms reporting an increase in new orders this month.

The survey's indicators for labor market conditions suggest a pickup in hiring this month. Over 30 percent of the firms reported increases in employment this month, up from 24 percent in January. The employment index increased 8 points.

The firms also reported overall higher average work hours in February, although the workweek index fell three points to 13.7.

The future employment diffusion index increased six points to 40.4. And 45 percent of the firms expect to increase employment over the next six months. Over 44 percent of the responding firms expect to increase capital spending over the next six months, with the future capital spending index increasing four points in February, its highest reading since April 1984.

The Manufacturing Business Outlook Survey is a monthly survey of manufacturers in the Third Federal Reserve District. Participants indicate the direction of change in overall business activity and in the various measures of activity at their plants.

The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank and savings and loan holding companies, and provides financial services to depository institutions and the federal government.

It is one of the 12 regional Reserve Banks that, together with the Board of Governors in Washington D.C., make up the Federal Reserve System.