The companies that responded to the Survey of manufacturing business outlook reported no improvement in business terms that month this. The indicator for general activity, which rose sharply in March, fell to slightly negative reading in April. Other broad indicators suggested a similar relapse in growth that was reported last month. The indicators for both employment and hours worked also declined notably. Despite the weakness in current conditions, indicators of the survey of future activity showed continued improvement, suggesting that the decline is considered temporary.
Current indicators are readings from last month
The diffusion index of current activity fell from 12.4 in March to -1, 6 this month. The index turned positive last month after six consecutive negative readings (see Chart 1). New orders and shipments current indices also fell this month. The percentage of companies (23 percent) reporting an increase in new orders was exactly offset by the percentage reporting a decline. The current new orders index fell to 15.7 from scratch this month, while the index of current shipments fell sharply, from 22.1 to -10.8. Unfilled orders and delivery time indexes suggested weakness, as both indices were in negative territory this month. Companies continued to report overall declines in inventories.
Indicators Survey of Employment corroborate the weakness of other general indicators this month. The employment index fell 17 points and recorded its fourth consecutive negative reading. Nearly 62 percent of companies reported no change in employment this month, but the percentage of reduction ratios from 17 percent in March to 27 percent this month. Firms reported a notable decline in average working hours. The index fell 22 points and returned to negative territory after the first positive reading last month to three months
Output prices rise slightly
prices manufactures, overall, increased slightly this month. The prices received index rose 4 points, to 7.4, its second consecutive positive reading (see Chart 2). But the largest share of companies (75 percent) reported no change in prices this month. input price increases were reported by 15 percent of companies this month. The prices paid index, which remained negative for seven consecutive months, increased 14 points to 13.2.
Outlook Improves Again this month, despite the current weakness
The future indicators survey bucked the trend to weaken existing indicators this month . The diffusion index for increased future general activity reading of 28.8 in March to 42.2 this month. This is the highest value for the index in 15 months (see Chart 1). The largest share of companies (51 percent) expect an increase in activity over the next six months, while only 9 percent expect a decline. The forward index of new orders and shipments are moved over this month, increasing 10 points and 7 points respectively. The future employment index also rose, from 6.3 to 14.2. More than 25 percent of companies surveyed expect to increase employment levels over the next six months. This is slightly higher than 22 percent as increased employment last month. The indices of future prices paid and received more slightly this month, increasing 12 points and 8 points respectively.
Spending on security and regulatory compliance is on the rise
in the particular issues this month, firms were asked about recent trends expenses related to security and regulatory compliance. Sixty percent of companies surveyed reported an increase in spending for security cyber / network, while 31 percent reported an increase in spending for physical security. The largest percentage of companies (74 percent) reported an increase in spending for the general regulatory compliance, and 26 percent characterizes these substantial increases. As a share of total capital expenditure, spending on data security (5 percent) exceeded expenditures for physical security (3 percent), and their combined total exceeded the average share for compliance regulatory (6 percent).
Summary
Survey Business Manufacturing This month suggests a relapse of manufacturing growth in the region. The indicators of the survey for the general activity, new orders, shipments, and employment all fell notably from their reading in March. Despite the weakness reported this month, the company forecasts for the next six months showed continued improvement, suggesting that the reported decline in growth should be temporary.
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