The Philadelphia Fed’s index tracking manufacturing conditions in its region, seen as a solid indicator for several other areas around the nation, declined to its lowest point since March 2009. The manufacturing industry index fell to a level of – (negative) 30.7, well below what is considered a neutral rating (zero). News of stagnant and/or slowing conditions mirrors findings in recent months within the Credit Manager’s Index (CMI), prepared by NACM Economist Chris Kuehl, PhD.
While far from a crash thus far, the noticeable slowing of orders leaves few silver linings. The Philadelphia Fed study also found the following:
- Demand for manufactured goods paralleled the decline in the general activity index, falling 27 points.
- About 29% of the firms had scheduled shutdowns or slowdowns during the summer months this year.
- About 40% said that seasonal factors have a significant influence on monthly production levels.
- The current employment index fell 14 points to -5.2, recording its first negative reading in 12 months.
Brian Shappell, NACM staff writer