Manufacturing activity in the Philadelphia area has seen a substantial turnaround in the month of February, the Federal Reserve Bank of Philadelphia revealed in a report released on Thursday.
The Philly Fed said its diffusion index for current general activity surged to a positive 5.2 in February from a negative 10.6 in January, with a positive reading indicating growth. Economists had expected the index to rise to a negative 8.0.
With the much bigger than expected increase, the Philly Fed Index returned to positive territory for the first time since August.
The jump by the headline index partly reflected a turnaround by shipments, as the shipments index soared to a positive 10.7 in February from a negative 6.2 in January.
The new orders index also showed a significant increase but remained negative, climbing to a negative 5.2 in February from a negative 17.9 in January.
Meanwhile, the Philly Fed said the number of employees index tumbled to a negative 10.3 in February from a negative 1.8 percent in January, suggesting a faster decrease in employment.
The report also showed the prices paid index rose to 16.6 in February from 11.3 in January, while the prices received index edged down to 6.2 from 6.3.
Looking ahead, the Philly Fed said the survey’s broad indicators for future activity rose, suggesting more widespread expectations for overall growth over the next six months.
The diffusion index for future general activity surged to a positive 7.2 in February from a negative 4.0 in January, partly reflecting sharp increases by the future new orders index and the future shipments index.
A separate report released by the New York Federal Reserve on Thursday showed regional manufacturing activity has contracted at a substantially slower rate in the month of February.
The New York Fed said its general business conditions index skyrocketed to a negative 2.4 in February from a negative 43.7 in January, although a negative reading still indicates contraction. Economists had expected the index to surge to a negative 15.0.
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