By Ed Frankl
Factory activity in the Philadelphia area expanded at a weaker pace in May, with demand continuing to be subdued, although firms remain optimistic over growth ahead.
The Federal Reserve Bank of Philadelphia's index for business activity was 4.5 in May, it said Thursday, down from 15.5 in April, and below expectations that the index would dip to 8.0, according to economists polled by The Wall Street Journal.
The Philadelphia Fed survey polls manufacturers in the Third Federal Reserve District, which covers eastern Pennsylvania, southern New Jersey and Delaware.
Indexes for new orders and shipments declined on month, with the employment index also indicating an overall decline in employment in the sector.
More than 29% of the firms surveyed reported increases in general activity, while 25% reported decreases, the Philadelphia Fed said. However, almost half of firms expect activity to pick up in the next six months, while only around 12% expect it to worsen.
Price indexes eased a little, remaining below long-run averages, but still indicate overall increases in prices, after inflation in the U.S. was stickier than expected in recent months.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
05-16-24 0921ET
