The U.S. manufacturing industry is looking strong. However, two states in particular have reported exceptional growth: New York and Philadelphia.
According to the Manufacturing Business Outlook Survey, the diffusion index for Philadelphia’s manufacturing industry in March was 22.3. While that’s slightly lower than its 25.8 index in February, it still shows strong, healthy growth. When reporting the state’s 22.3 diffusion rating, the Federal Reserve Bank of Philadelphia said that new manufacturing orders had increased by 11 points and new shipments orders had increased by 17 points. Furthermore, the Federal Reserve Bank of Philadelphia says that 35% of manufacturing companies surveyed said they were hiring more workers, while only 9% said they were fewer fewer works for the month of March.
It’s important to note that the diffusion index differs from the Purchasing Managers’ Index (PMI). With PMI, any rating over 50 indicates growth. With the diffusion index, anything over zero indicates growth. Therefore, Philadelphia’s 22.3 diffusion index is pretty good.
So, how did New York’s manufacturing industry fare for the month of March? The diffusion index for the Empire State was 22.5 for March, showing it expanded but at a slower pace than its Philadelphia counterpart.
While a diffusion index of 22.5 may seem low, it’s much higher than what market analysts had predicted. Previous reports had suggested that New York’s manufacturing industry would receive a diffusion index of just 15 for March. This latest report reveals that New York’s manufacturing sector is stronger and more robust than what many analysts previously believed.
According to the Federal Reserve Bank of New York, the index for new orders in March rose to 16.8, and the shipments index rose to 27. It also says that manufacturing companies in New York report expansion at a faster pace than February, with 38% of respondents saying that market conditions had improved from February to March.
“Looking ahead, firms continued to be optimistic about the six-month outlook, though somewhat less so than last month. The index for future business conditions fell six points to 44.1,”‘ wrote the Federal Reserve Bank of New York. “The index for future prices paid reached its highest level in several years, indicating a widespread expectation that input prices would increase in the months ahead. The capital expenditures index, at 29.4, suggested that firms’ capital spending plans remained strong,” it added.
New York and Philadelphia aren’t the only states in which the manufacturing industry is growing. Numerous reports show steady growth throughout the country. And with a newfound focus on manufacturing innovation, this isn’t a trend that’s going to fade anytime soon.