Thursday, September 17, 2009

Philly Manufacturing Strong

The Philadelphia Fed details:

The region’s manufacturing sector is showing signs of growth, according to firms polled for this month’s Business Outlook Survey. Indexes for general activity, new orders, and shipments all registered positive readings for the second consecutive month. Indexes for employment, work hours, and the prices received for manufactured goods remained negative, suggesting continued weakness.

Source: Philly Fed


  1. same odd picture like in the empire man. survey:

    new orders coming in nicely, but companies are not hiring, but even slightly increase firing.

    to me there are two eplanantions:

    1)corporate leaders still have low visibility/no faith in the sustainebility of the recovery.

    2)there is a very unhealthy trend ongoing with prices. prices paid (commodity driven) are exploding, while prices received are declining. result: pressure on margins hence limited room for hiring.
    that´s the outcome of the feds reflate at all cost/weaken the dollar strategy.
    this kind of policy led to the rollover in the economy last summer, when companies experienced higher input costs.
    difference: in a far stronger pre-lehman economy they were able to raise prices a bit in order to protect margins. but in todays environment (low utilization, high unemployment) there´s neraly no chance for price hikes.

  2. "new orders coming in nicely, but companies are not hiring, but even slightly increase firing"

    in looking at the data, it looks like this has been a pretty typical pattern, especially coming out of recessions. new orders come back, but hiring is delayed until the economic rebound has been proved (hence why unemployment is a lagging indicator).

    as for prices paid / received. i agree, but the historical data shows prices paid have basically always been higher than prices received. i wonder if this has to do with psychology of business owners (i.e. it's very easy to complain about price increases on the input side).

  3. Whoa,
    Prices paid is the only right hand part of that chart. Strong indeed.

  4. Please focus on issues that are really forward looking and rates of change, not absolute levels - inventories are terrible, and the new and unfilled orders are worse than in August. The rates of improvement are negative. The inventory restocking rally is well on its way down folks :)

  5. CEO,
    you are a green shoot abolishinist, go away!