Philadelphia Fed Manufacturing Index

The Philadelphia Fed Manufacturing Index is the headline gauge of the Manufacturing Business Outlook Survey. The Federal Reserve Bank of Philadelphia runs a monthly poll of factory conditions. It covers high level executives at manufacturing firms in Delaware, southern New Jersey and eastern and central Pennsylvania. Owners, chief executives and plant managers report direction of change.

Participation is voluntary, so respondents differ slightly across months. The panel stays largely the same over time as firms join or leave. The publisher states no fixed sample size.

The survey tracks breadth of change across firms, not size of change. A value above 0 means more firms expanded than contracted on balance. A value below 0 means more firms contracted than expanded on balance.

The gauge covers factories only and does not cover services. A separate survey covers nonmanufacturing activity. It is not a national index, though breadth often moves with national factory activity.

The headline comes from its own general activity question. It is not built as an average of other components.

Responses are collected electronically over 8 days. Results are published at 8:30 ET on a fixed monthly schedule. The text file for the release appears first, followed by supporting files and pages after a short delay.

Each package holds a narrative report with charts and a Summary of Returns table. It also holds a portable document version, a plain text version and downloadable data files. The package also holds special questions and expectations for 6 months ahead.

Seasonally adjusted history is revised once a year to bring in updated seasonal factors. Such revisions are typically minor. History files therefore differ slightly from values cited in archived portable reports. Recurring price material appears in a separate release.

The headline comes from its own question, so components give context rather than arithmetic inputs.

• General business activity: overall conditions at the firm and the summary gauge of the survey.
• New orders and unfilled orders: demand inflow with leading character plus the cushion of orders awaiting fulfillment.
• Shipments and delivery times: actual goods shipped with coincident output character plus tightness of supply chains.
• Inventories: stock levels held by firms.
• Prices paid and prices received: input price pressure faced by factories plus output prices firms set for goods sold.
• Employment, workweek and capital plans: hiring conditions and labor use intensity plus capital spending plans asked only for expectations ahead.

Special questions cover production growth and capacity use. They also cover constraints around labor supply, supply chains, finance and energy. They also cover wage growth and price expectations.

• Tally shares: for each indicator, count the share reporting increase, no change and decrease against the prior month.
• Seasonal adjustment: adjust each of the three shares with monthly factors using the United States Census Bureau X-12 method. Factors are reestimated each year from long history.
• Diffusion index: subtract the adjusted decrease share from the adjusted increase share. The no change share does not enter the subtraction but shapes interpretation.
• Scale and zero: scores run from -100 to 100, with 0 meaning equal increase and decrease shares. Above 0 means expansion on balance. Below 0 means contraction on balance.
• Worked illustration: if 40% report an increase and 15% report a decrease, the index equals 40 minus 15, or 25.0. The same 10.7% can come from 10.7% minus 0.0% with 89.3% no change. It can also come from 50.7% minus 40.0% with 9.3% no change. Breadth matters as much as the headline number.
• Headline and comparison: the headline uses its own general activity question through the same steps. It is not a weighted average of components. One national gauge centers at 50 with half of no change counted as expansion. This diffusion index centers at 0 as increase share minus decrease share. Do not read a positive value as percent growth in output.