Manufacturers in region show optimism in economy

Steady as it goes was the theme of this month's Business Outlook Survey released Thursday by the Federal Reserve Bank of Philadelphia.

The survey of area manufacturers showed continued modest improvement in economic activity and an optimism that things will be better in six months.

It marked the seventh month in a row that the survey showed a positive response from manufacturers.

The survey is based on responses from area manufacturers questioned about a series of business indicators and whether they were up or down for the month. Those indicators include new orders, shipments, inventories, number of employees, and average employee workweek.

In each category, the survey notes what percentage of manufacturers report positive results for the month vs. those who report negative results.

For instance, 35.2 percent reported that new orders were up vs. 20 percent reporting a decline. (The rest reported "no change.") The difference - 15.2 - is the diffusion index.

Virtually every key category showed a positive diffusion index and a modest improvement in the figure over November.

While total employment seemed static (diffusion index of 1), the average workweek showed marked improvement over November, with more firms reporting longer work weeks.

As for the future, a majority of firms (56.5 percent) expect business to pick up over the next six months. Only 12.6 percent expected it to slow. That level of optimism was on par with that reported in November.