Philly Fed Manufacturing Index Remains Negative

Manufacturers in the Philadelphia area said business shrank in May for the third straight month, the Federal Reserve Bank of Philadelphia reported Thursday.

Manufacturing accounts for about 20% of U.S. economic production and is one of trucking’s largest and most important customer segments.

The Fed’s factory index reading was -4.8 this month, after a reading of -8.8 in April. A negative reading indicates that more manufacturers in the survey said business deteriorated than improved.

The current string of monthly contractions in manufacturing in the Philadelphia area is the longest since the 13 months that ended in December 2001.

The Fed said its indexes of new orders, shipments and employment also remained negative, but improved from their April readings.

About 17% of the firms surveyed indicated that they have experienced some improvements attributable to the end of the war in Iraq, the report said.

Economists had expected a reading of -3.0, according to Bloomberg.

A number of economists revised their forecasts higher after a report early Thursday that showed manufacturing expanded in New York state, Bloomberg said. The Federal Reserve Bank of New York reported its Empire State index rose in May to 10.6 from -20.2 in April.

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

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