Philly Fed Business Conditions

Philly Fed Business Conditions is the headline current general activity index of the Manufacturing Business Outlook Survey, sometimes called the Philly Fed Index. The Federal Reserve Bank of Philadelphia has run a monthly qualitative survey, which asks opinions rather than measuring output, since May 1968. It asks owners, CEOs, and plant managers in Delaware, southern New Jersey, and eastern and central Pennsylvania for the direction of change at their firms. The headline gauges breadth, or how widespread change is, across Third District factories only, though the District has served as a proxy for US manufacturing.

Responses are collected electronically over 8 days closing on the Monday before publication, and results reflect replies received by then. Publication is usually at 8:30 AM ET on the third Thursday of each month, barring holidays, and dates for next year appear in November.

Each release includes a narrative with charts, a table for the present month and 6 months ahead, special questions, and CSV, TXT and XLS files. The table shows increase, no-change, and decrease shares, and the text file appears first. Some releases add special-topic questions and a separate quarterly Price and Inflation Expectations release.

Seasonally adjusted history is revised each January using data through the prior December. Firm replies are not revised, so quoted figures come from the release of that time.

The headline comes from its own question, not an average of components, so each indicator below is read alongside it. Most indicators ask about the present month and 6 months ahead, except capital expenditures, which are future only.

• General Activity: the broadest gauge, the headline level for the responding firm from its own question.
• New Orders, Shipments, and Unfilled Orders: customer orders placed, orders shipped, and backlog not yet delivered.
• Delivery Times and Inventories: time from order to receipt, where a rise means slower deliveries, and product stock on hand.
• Prices Paid and Prices Received: input prices paid and output prices charged to customers.
• Number of Employees and Average Workweek: people employed and average weekly hours.
• Capital Expenditures: spending on capital investment, asked for 6 months ahead only.

In the April 16, 2020 release, current activity fell to -56.6 from -12.7 in March 2020, the lowest since July 1980. New orders fell to -70.9, the lowest ever, with 60% reporting decreases and 4% increases, while shipments fell 74 points to an all-time low. Employment fell to -46.7 and the workweek to -54.5, while prices paid fell to -9.3 and prices received to -10.6. Future activity rose 8 points to 43.0, with 53% expecting gains and 10% declines, showing current weakness with higher expectations without being a forecast.

1. Raw shares: For each indicator, count the % reporting an increase, no change, and a decrease.
2. Seasonal adjustment: Adjust each of the 3 shares separately with Census X-12 factors, or estimates removing normal seasonal swings, recomputed each January. Pandemic volatility is excluded from the factors.
3. Diffusion index: Subtract the adjusted decrease share from the adjusted increase share. If 40% report an increase and 15% a decrease, the index is 25.0.
4. Scale: Scores run from -100 to +100 with zero as equal shares, showing breadth, or how widespread change is, not size. The no change share is ignored in math but shapes reading, since 30/50/20 and 55/45/0 both give +10.0.