2017 Economic Calendar
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Philadelphia Fed Business Outlook Survey  
Released On 5/18/2017 8:30:00 AM For May, 2017
PriorConsensusConsensus RangeActual
General Business Conditions Index - Level22.0 19.6 16.0  to 25.0 38.8 

Highlights
Another exceptional Philly Fed report points once again to acceleration for the factory sector. The general business conditions index jumped to 38.8 which next to February's 43.3 is the highest since 1983. Activity is very brisk with shipments exceptionally strong at 39.1 with the workweek moving higher (21.7) and hiring underway (17.3). And order readings point to exceptional activity in the months ahead with new orders at 25.4 and backlogs on the rise at 9.0.

Delivery times, at 6.4 for a rare streak of seven straight increases, continue to signal tight conditions in the supply chain which points to the risk of price pressures and delays. Input costs, at 24.2, continue to show sharp monthly acceleration and in another sign of strong demand, manufacturers in the sample are passing some of their higher costs through with prices received extending a run of strength at 15.3.

There is one small weakness in the report and that's a softening in the general outlook which fell 10.6 points to 34.8 and the lowest score for this reading since November. But given the strength of this report and risk of overheating, slowing may be welcomed. This report was the first to signal an uplift for manufacturing where production in Tuesday's industrial production report showed unusual strength. Manufacturing, which had a very flat 2016, appears to be getting a lift from domestic demand tied in part to the recovery in the energy sector.

Recent History Of This Indicator
The Philadelphia Fed index was the first advance report to signal what has been, however, mostly phantom acceleration in the factory sector. Of special note, like it is in the Empire State report, is unusual lengthening in delivery times, delays consistent with demand-related congestion in the supply. New orders have been showing great strength in this report with backlog orders up in each of the prior 6 reports. Forecasters are calling for sustained strength, at a consensus 19.6 vs April's 22.0.

Definition
The general conditions index from this business outlook survey is a diffusion index of manufacturing conditions within the Philadelphia Federal Reserve district. This survey, widely followed as an indicator of manufacturing sector trends, is correlated with the ISM manufacturing index and the index of industrial production.  Why Investors Care
 
[Chart]
The Philadelphia Fed''s business outlook survey is a good leading indicator for the index of industrial production. It is reported in the third week of the month and thus has a lead time of nearly three weeks.
Data Source: Haver Analytics
 
 

2017 Release Schedule
Released On: 1/192/163/164/205/186/157/208/179/2110/1911/1612/21
Release For: JanFebMarAprMayJunJulAugSepOctNovDec
 


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