Philadelphia-area manufacturers are reporting sunny conditions and a bright outlook for the region.
Manufacturers responding to the Federal Reserve Bank of Philadelphia's July Business Outlook Survey indicated that manufacturing conditions in eastern Pennsylvania, southern New Jersey and Delaware have improved.
"The survey's indicators of future activity also showed a notable rise, suggesting that firms expect a pickup in business over the next six months," the Philadelphia Fed said on its website.
The survey's broadest measure of manufacturing conditions—the diffusion index of current activity—increased from 12.5 in June to 19.8, its highest reading since March 2011.
The percentage of firms reporting increased activity in July (37 percent) was greater than the percentage reporting decreased activity (17 percent).
Among other current indicators suggesting continued growth this month, the shipments index jumped from 4.1 in June to 14.3 in July.
Conditions in the labor market also showed a notable improvement.
The current-employment index, at 7.7, registered its first positive reading in four months.
The percentage of firms reporting increases in employment (18 percent) exceeded the percentage reporting decreases (10 percent). Firms also indicated an increase in the average workweek compared with June.
Future Looks Bright
The survey's future indicators suggest improved optimism among the reporting manufacturers.
The future-activity index increased 11 points from its reading in June.
Nearly 52 percent of firms are expecting increases in activity over the next six months, up from 45 percent in June, according to the Philadelphia Fed.
The new-orders and future-shipments indexes improved, increasing 17 points and 14 points, respectively.
Meanwhile, the future-employment index also improved this month, increasing nine points. Nearly 41 percent of firms expect increases in employment over the next six months, compared with 33 percent in June.
Most Manufacturers Unfazed by Obamacare
The Philadelphia Fed added three special questions regarding the impact of the Affordable Care Act on manufacturing firms.
In response to the requirements of Obamacare:
- More than 70 percent of the surveyed firms indicated that they do not plan to make any changes to their employee health plans, because they already offer health insurance that meets the requirements.
- Nearly 14 percent of the firms indicated that they will be cutting back or dropping health insurance coverage.
- Nearly 71 percent of the respondents reported that they have made minimal or no changes to their employment ranks.
- Eleven percent indicated that they have ramped up outsourcing of work, while 6 percent have shifted from full-time to part-time workers.