Fed Reports Philadelphia Manufacturing Contraction in June

anufacturing growth in the Philadelphia area fell this month, moving into negative territory for the first time in two years, the Federal Reserve reported Thursday.

The minus 2.2 level, down from May’s 7.3 reading, was the first contraction since June 2003, the Fed said. The factory sector is one of trucking's largest and most important customers.

Index numbers above zero mean that a higher percentage of manufacturers surveyed reported an improvement in business conditions; below zero means they reported deterioration.

The prices paid index remained in positive territory, at 23.5 compared with 30.9 in May, and the prices received index also remained positive, at 8.1 compared with May’s 15.7 reading.

The Fed reported its new orders index fell to 2.5 in June from 15 in May, while the shipments fell to 6.6, from 14.9.

The Fed’s future activity index rose to 30.6 in June from 22.3 in May, its highest reading in six months.

The Philadelphia Fed surveys about 100 manufacturers for the index in eastern Pennsylvania, Delaware, and southern New Jersey.