Manufacturing activity in the Mid-Atlantic region stalled in August as new orders contracted and shipments slowed, according to the Federal Reserve Bank of Philadelphia’s monthly Manufacturing Business Outlook Survey.
The survey’s general activity index fell sharply to -0.3 from 15.9 in July, indicating that many firms reported declines as reported gains. The index had posted positive readings in the previous three months.
Demand softened. The new orders index dropped 20 points to -1.9, its first negative reading since April. Shipments also lost momentum, with the index sliding to 4.5 from 18.9 in July.
Employment continued to edge higher but at a slower pace. The employment index slipped to 5.9 from 9.9. Most firms reported no change in headcount, though more reported increases than decreases. The average workweek lengthened modestly.
Price pressures remained pronounced. The prices paid index rose eight points to 66.8, the highest since May 2022, suggesting widespread increases in input costs. The prices received index nudged higher to 36.1, with more than a third of manufacturers reporting higher selling prices and none reporting declines.
Firms also lifted their price outlooks. They now expect to raise their own prices 4.1% over the next year, up from a 3.8% forecast in May. Their projection for U.S. consumer inflation edged down to 3.6% from 3.8%.
Looking ahead, manufacturers were more optimistic. The index for future general activity climbed to 25.0 from 21.5, while both future new orders and shipments reached their highest levels since May. Expectations for capital spending also strengthened, with the index more than doubling to 38.4, its strongest reading since January.
The survey, conducted between August 11 and August 18, covers manufacturers in eastern Pennsylvania, southern New Jersey, and Delaware.
