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/Editors: Effective today, the Philadelphia Fed's BOS will be released every third Thursday of the month instead of very third Friday. The next release date is Thursday, Oct. 15. Release time is the same: 10 a.m./

 /Editors: Effective today, the Philadelphia Fed's BOS will be released every third Thursday of the month instead of very third Friday. The next release date is Thursday, Oct. 15. Release time is the same: 10 a.m./
 PHILADELPHIA FED RELEASES SEPTEMBER BUSINESS OUTLOOK SURVEY
 PHILADELPHIA, Sept. 17 /PRNewswire/ -- Manufacturing activity is still expanding, according to this month's Business Outlook Survey, compiled by the Federal Reserve Bank of Philadelphia Research Department.
 Most current economic indicators remain positive; however, little changed from the previous month, and indicators of future activity show marginal improvement this month. Although survey participants report no change in employment from August, their six-month employment forecasts show some improvement. Manufacturing input and output prices remain stable, but more respondents are expecting future price changes.
 Current Conditions
 The general activity diffusion index, which now stands at 14.7, improved slightly this month from a level of 12.5 in August. The index has remained positive for the past seven months. Nearly 55 percent of the survey's respondents indicate no change in activity from the previous month, but those experiencing a pickup in activity (28 percent) outnumber those experiencing a decline (13.1 percent).
 Individual indicators of production activity show little change from last month. Shipments are increasing at nearly 33 percent of the firms reporting, compared with 15 percent reporting declines. New orders remain relatively strong -- nearly a third of the reporting firms report increases. The new orders diffusion index which now stands at 20.9 has remained relatively unchanged for the past three months.
 Survey respondents report little change in labor market conditions. Nearly 80 percent of reporters indicate no change in the number of workers compared with the previous month. The percentage of reporters increasing the number of workers (11 percent) is close to the percentage reducing the number (10 percent). The employment diffusion index which now stands at 0.4 has remained near zero for the past three months.
 Prices
 Despite apparent growth in manufacturing activity recently, prices of manufactured goods are experiencing no upward pressure. The diffusion index for prices received, which now stands at -3.1, has remained near zero for the past seven months (see chart). A substantial majority (80 percent) report no change in prices this month, and the percentage of firms reporting price reductions (11 percent) edges out the percentage reporting price increases (8 percent). Over the next six months, however, nearly 37 percent of those surveyed expect increases in their prices. The diffusion index for future prices paid has been somewhat higher the past two months, compared with levels reported earlier in the year.
 Price increases for raw materials and other purchased inputs have also moderated according to this month's survey. Despite a slight upward drift in recent months in the diffusion index for prices paid, the index fell from a level of 17.2 in August to 4.5 this month. In their outlook, however, nearly 39 percent of those polled expect an increase in input prices over the next six months, compared with only 2 percent expecting a decline.
 Outlook
 Most indicators of future economic activity have risen somewhat this month. Sixty-one percent of those polled expect activity to pick up over the next six months, compared with just 5 percent that expect a deterioration. The diffusion index for future activity, which stands at 55.7 this month, increased slightly from a level of 51.3 recorded in August. Expectations regarding new orders and shipment have also risen this month and are consistent with the overall outlook. On balance, those surveyed expect both unfilled orders and delivery times to increase during the next six months.
 Reflecting perhaps an improved outlook, survey participants see an increase in the number of workers employed over the next six months. Nearly 33 percent of those responding to the survey indicate plans to add to current payrolls, compared with just 7 percent expecting reductions. This is in contrast to the previous month when just 19 percent of the reporters indicated plans to hire additional workers and 13 percent expected reductions.
 Summary
 The September Business Outlook Survey indicates that the region's manufacturing sector is still improving. Current indicators suggest that new orders and shipments are increasing and prices of manufactured goods are stable. Although respondents indicate no change in employment this month, their forecasts for the next six months suggest an increase in hiring ahead.
 This survey covers the Third Federal Reserve District, which includes the eastern two-thirds of Pennsylvania, southern New Jersey including Trenton, and the whole state of Delaware.
 BUSINESS OUTLOOK SURVEY: SEPTEMBER 1992
 Indicator September vs. August
 Decr. No Incr. Diffusion
 Change Index
 GENERAL BUSINESS
 CONDITIONS
 What is your evaluation
 of the level of general
 business activity? 13.1 54.8 27.7 14.7
 COMPANY BUSINESS
 INDICATORS
 New orders 12.4 51.7 33.3 20.9
 Shipments 15.3 52.0 32.5 17.3
 Unfilled orders 15.3 76.5 7.1 -8.2
 Delivery time 7.0 91.5 0.6 -6.4
 Inventories 18.7 58.7 22.5 3.8
 Prices paid 3.6 88.3 8.1 4.5
 Prices received 10.6 79.5 7.5 -3.1
 Number of employees 10.2 78.7 10.7 0.4
 Average employee
 workweek 13.0 66.2 20.8 7.7
 Capital expenditures --- --- --- ---
 Indicator Six Months from now vs. September
 Decr. No Incr. Diffusion
 Change Index
 GENERAL BUSINESS
 CONDITIONS
 What is your evaluation
 of the level of general
 business activity? 5.3 29.8 61.0 55.7
 COMPANY BUSINESS
 INDICATORS
 New orders 7.6 30.7 61.7 54.2
 Shipments 5.0 31.7 63.0 58.0
 Unfilled orders 11.2 55.0 33.7 22.5
 Delivery time 3.2 77.0 19.5 16.3
 Inventories 29.8 44.9 25.3 -4.5
 Prices paid 1.9 59.6 38.5 36.5
 Prices received 2.5 59.7 36.5 34.0
 Number of employees 7.0 60.3 32.5 25.6
 Average employee
 workweek 11.0 51.8 35.9 24.9
 Capital expenditures 10.6 44.9 35.8 25.2
 Notes:
 1. Items may not add up to 100 percent because of omission by respondents.
 2. All data seasonally adjusted.
 3. Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease.
 /delval/
 -0- 9/17/92
 /CONTACT: Rossana Mancini of the Federal Reserve Bank of Philadelphia, 215-574-3810/ CO: Federal Reserve Bank of Philadelphia ST: Pennsylvania IN: FIN SU: ECO


JS-MK -- PH001 -- 0512 09/17/92 10:00 EDT
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Date:Sep 17, 1992
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