The US Philly Fed manufacturing index almost stayed the same at -1.8 this month, as compared with the consensus projections of a rebound to 3. The current new orders index fell for the second straight month to -1.9 from 0. Meanwhile, the shipments index was up from earlier -10.8 to -0.5. But the total number of companies reporting a drop in shipments was slightly more than the number of firms reporting an increase. The constant weakness in shipments and new orders led to subdued regional business confidence in May.
The employment index rose but continued to be in the negative territory for the fifth straight month. It rose from -18.5 to -3.3. Over 69% of companies reported no change in employment; however, the number of companies reporting decreases was more than the number of firms reporting increases. The average workweek index continues to be in negative territory at -15.1. It rose from the earlier reading of -16.2. This suggests that labor demand in manufacturing continues to be weak at regional level at least, noted Barclays in a research report. Meanwhile, prices received increased to 14.8, the highest level since October 2014.
“With the ISM-adjusted version of the Philly Fed index at 47.6 in May (previous: 43.1), our baseline outlook for tepid output and employment growth in the sector remains very much intact”, said Barclays.
