NEW YORK – Activity at U.S. Mid-Atlantic factories expanded at a quicker pace in February, a survey by a regional central bank showed on Thursday.
The Philadelphia Federal Reserve's (search) business activity index rose to 23.9 in February from 13.2 in January. A Reuters poll of economists had produced a median forecast of 17.0.
The regional measure pointed to 21 straight months of expansion, indicated by a reading above zero.
According to the Philadelphia Fed, most indicators within the survey suggested a somewhat faster expansion in February. Moreover, "the region's manufacturing executives remain generally optimistic that business conditions will improve over the next six months," the Fed said in a statement.
The six-month outlook for business conditions edged higher to 26.5 from 25.5 a month earlier. The new orders index also was higher, rising to 11.7 from 9.8 in January.
Not all of the indicators were higher, however.
The employment index slipped to 12.3 in February from 17.0 in January, while prices paid slipped to 43.5 from 66.1 the prior month.
"This report is very favorable as a whole with new orders and shipments considerably stronger. The employee component is disappointing, but that needs to be kept in context that the general labor market conditions are getting better," said Richard DeKaser, chief economist at National City Corp (search) in Cleveland.
Ken Mayland, president of Clearview Economics (search) in Pepper Pike, Ohio, said the report was good news on the manufacturing sector after a national report on industrial production released on Wednesday showed output was flat in January.
"This is a more positive result. It suggests manufacturing has some tailwinds behind it," he said.
Manufacturers also were cautiously optimistic about the outlook for exports as a proportion of their business.
In response to a special question in the February survey, 70.2 percent of manufacturers said they expected the share of the products they export to stay the same in 2005.
Just over 26 percent, however, predicted the share of exports would rise and less than 4 percent said they expected a decrease.