Philly Fed's District Factory Activity Contracted in September

By Ed Frankl

Manufacturing activity in the Philadelphia area contracted in September, a lower reading than expected, indicating further weakening of the region's industrial sector.

The Federal Reserve Bank of Philadelphia said Thursday that its index for current general activity was minus 13.5 in September--returning the same level as July--compared with a positive reading of 12 in August. It marked the index's 14th negative reading in the past 16 months, after August's measure snapped 11 months of contractions in the index.

The data, based on a survey among manufacturers in the region, suggest that activity contracted as the index came in below zero.

The reading compared with expectations of neither contraction nor growth by economists polled by The Wall Street Journal, who expected the index to come in at zero.

The Philadelphia Fed survey polls manufacturing firms in the Third Federal Reserve District, which covers eastern Pennsylvania, southern New Jersey and Delaware.

The survey's indicators for general activity, new orders and shipments were all negative after turning positive in August, the Philly Fed said.

More than 29% of firms polled reported weakening business conditions, while 16% said conditions improved, the survey said.

The new orders index declined to minus 10.2 from a positive 16.0 in August, while the shipments index fell to minus 3.2, the Philly Fed said.

Companies continued to report a decline in employment, with the index little changed at minus 5.7, it added.

However, most future activity improved, it said, suggesting better expectations for overall growth over the next six months.

Survey responses were collected from Sept. 11 to Sept. 18.

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

September 21, 2023 09:04 ET (13:04 GMT)

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