Business Outlook Survey Shows Mid-Atlantic Manufacturing Contracted in January

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A worker in the mid-Atlantic manufacturing sector works with raw aluminum materials. (PHOTO: REUTERS)

The Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey showed mid-Atlantic activity contracted in the month of January, though rose slightly.

(UPDATE: A previous version initially reported the region as the Midwest, which is covered in the ISM’s Chicago Business Barometer.)

Economists expected the index to edge down to -6.0. Even though industry conditions improved modestly in the survey, which also includes New Jersey and Delaware, manufacturers turned even more pessimistic about their future prospects. The six-month outlook gauge fell to 19.1 from 24.1 in December, the lowest degree of confidence since November 2012. Manufactures predicted drop-offs in new orders and shipments.

philadelphia fed manufacturing business outlook survey data graph

Source: Philadelphia Federal Reserve

The report out of the Philadelphia Fed follows another regional survey–the Empire State Manufacturing Survey–which was released last week by the New York Fed. The survey found manufacturing activity across New York contracted at the quickest pace since the recession in 2009. Traders and economists use the Fed’s regional surveys, five in all, as clues ahead of a carefully-watched gauge of national production conducted by the Institute for Supply Management. While the ISM sruvey will release that report on Feb. 1, the prior month also showed national contraction.