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PHILADELPHIA FED RELEASES APRIL BUSINESS OUTLOOK SURVEY

 PHILADELPHIA FED RELEASES APRIL BUSINESS OUTLOOK SURVEY
 PHILADELPHIA, April 17 /PRNewswire/ -- For the second consecutive


month, respondents to the Business Outlook Survey, compiled by the Federal Reserve Bank of Philadelphia Research Department, report increasing manufacturing activity.
 The diffusion index for overall activity has increased significantly over the past two months. The expansion in manufacturing activity is reflected in the growing number of new orders and shipments. The apparent improvement, however, has hot yet resulted in expanding payrolls.
 Current Conditions
 The diffusion index for overall business conditions, which increased from 18.4 to 24.6 in April, suggests that production is expanding in the manufacturing sector. Thirty-nine percent of the polled firms indicate that activity increased over March, while only 15 percent indicate that activity declined. The increase in the diffusion index has paralleled a rise in both shipments and new orders over the past several months. The April survey indicates that 39 percent of the firms polled report increases in shipments and 41 percent report increases in new orders. Manufacturers are keeping up with the increase in demand, as firms, on balance, report that the level of unfilled orders and delivery times remain virtually unchanged.
 The apparent increase in demand for manufactured goods has not yet translated into an increase in demand for labor; the April survey indicates little improvement on the employment front. Almost 67 percent of the firms polled report no change from the previous month in their employment levels. The percentage of firms adding workers (15 percent) is slightly outnumbered by the percentage making cuts (17 percent). The average workweek, however, is increasing at 23 percent of the firms polled; this compares with just 6 percent that reported an increase in the workweek in March.
 Prices
 Manufacturing prices are stable this month according to Business Outlook Survey respondents. Three-quarters of the reporters indicate that the prices of their goods were unchanged from March. The percentage of firms indicating price declines (13 percent) narrowly outnumbers those indicating price increases (11 percent). Fifty-six percent of the firms expect these prices to remain the same during the next six months; about 32 percent anticipate price increases over the same period.
 Input prices remain steady at nearly 76 percent of the reporting manufacturers during April. One-third of the reporters, however, anticipate an increase in these prices during the next six months.
 Outlook
 The diffusion index of future activity, which stands at 53.1 for April, indicates that firms expect further improvement in manufacturing activity over the next six months. Sixty-five percent of the firms polled expect the recent expansion of activity to continue. Similar optimism is expressed in forecasts for new orders and shipments. On balance, unfilled orders are expected to increase, but delivery times are expected to remain steady.
 The rise in recent manufacturing activity may be contributing to an increase in optimism regarding employment; the diffusion index for future employment increased from 2.0 in March to 15.9 in April. Although about 44 percent of the firms surveyed in April expect no change in their employment numbers during the next six months, about 36 percent forecast an increase in employment over that period. On balance, the average workweek is expected to increase as well during the next six months.
 Summary
 The April Business Outlook Survey indicates that manufacturing activity is increasing for the second consecutive month. The survey's individual indicators for shipments, new orders, and average workweek corroborate this trend. Surveyed firms forecast a continuation of the recent expansion over the next six months and are marginally more optimistic with respect to increases in future employment
 BUSINESS OUTLOOK SURVEY: APRIL 1992
 Indicator April vs. March
 Decr. No Incr. Diffusion
 Change Index
 GENERAL BUSINESS
 CONDITIONS
 What is your evaluation
 of the level of general
 business activity? 14.7 43.2 39.4 24.6
 COMPANY BUSINESS
 INDICATORS
 New orders 20.0 37.8 41.1 21.1
 Shipments 18.4 41.4 38.9 20.5
 Unfilled orders 22.0 55.5 22.4 0.4
 Delivery time 7.3 83.5 5.6 -1.6
 Inventories 30.6 48.4 19.6 -11.0
 Prices paid 8.3 76.1 15.0 6.7
 Prices received 12.6 75.4 10.9 -1.7
 Number of employees 17.3 66.7 14.6 -2.7
 Average employee
 workweek 17.2 59.7 23.1 5.9
 Capital expenditures --- --- --- ---
 Indicator Six Months from now vs. April
 Decr. No Incr. Diffusion
 Change Index
 GENERAL BUSINESS
 CONDITIONS
 What is your evaluation
 of the level of general
 business activity? 11.4 24.1 64.5 53.1
 COMPANY BUSINESS
 INDICATORS
 New orders 11.8 21.7 60.5 48.7
 Shipments 15.9 20.4 61.3 45.4
 Unfilled orders 12.7 45.7 37.3 24.6
 Delivery time 7.3 77.8 10.9 3.6
 Inventories 27.9 55.7 13.8 -14.1
 Prices paid 2.9 58.9 37.2 34.3
 Prices received 9.4 56.0 32.2 22.8
 Number of employees 19.8 44.4 35.8 15.9
 Average employee
 workweek 15.3 45.9 37.1 21.8
 Capital expenditures 11.2 50.8 27.0 15.8
 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- 4/17/92
 /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


MP-KA -- PH001 -- 9640 04/17/92 09:59 EDT
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