WASHINGTON – Manufacturing in the Philadelphia region expanded in October following five months of declines, a positive sign for a U.S. manufacturing sector which had been weakening for much of the year.
The Federal Reserve Bank of Philadelphia reported Thursday that its index of regional manufacturing activity had a reading of 5.7 in October following a -1.9 reading in September. Any reading above zero indicates expansion.
Manufacturing, which helped lift the country out of recession, had been slowing since the spring, battered by slower domestic demand and a slowing global economy which was hurting exports.
The better-than-expected reading from the Philadelphia survey followed a positive report on national manufacturing conditions. The Institute for Supply Management on Oct. 1 said that its manufacturing index grew for the first time in four months in September.
The gain in the Philadelphia index took it back into positive territory for the first time since April. Analysts said the gain provided further support to the view that manufacturing has improved modestly.
But Paul Dales, senior U.S. economist at Capital Economics, said, "It is clear that industry is still struggling to cope with the weak global backdrop."
Analysts noted that the new orders component of the Philadelphia index dropped into negative territory again and has been in positive territory only one month in the past six. The employment index is now at its lowest point since September 2009.