Federal Reserve Bank (Fed) of Philadelphia Manufacturing Index

The Philadelphia Fed Business Conditions index reflects current business conditions in the manufacturing sector in the Philadelphia Federal Reserve zone. This region includes Pennsylvania, New Jersey and Delaware.

The index is calculated based on a survey of leading industrial enterprises in the region. In addition to a general assessment of business conditions in the industry, business leaders are asked to assess whether the situation in their companies has improved, worsened or remained unchanged. In particular, respondents assess new orders, shipment, unfilled orders, suppliers' delivery times, inventories, prices paid, prices received, number of employees, average hours worked per week.

The region falling under the responsibility of the Philadelphia Federal Reserve Bank is one of the most economically active regions of the country, that is why its business conditions index is often monitored by analysts. The manufacturing sector usually demonstrates a more vivid cyclic nature and reflects current changes earlier than the economy in general. Therefore, the manufacturing sector state serves as a leading indicator of the US economy health.

The index is calculated as a difference between the percentage of positive estimates and the percentage of negative ones. If the final index value is positive, it means that the assessment of business conditions has improved on the average across the region. Readings below zero indicate worsening of business sentiment in the manufacturing segment of the economy.

Dynamics of the Philadelphia Fed Business Conditions index can cause insignificant volatility of dollar quotes.