Quotes from Capital Economics:
- The dip in the Philly Fed manufacturing index to 5.2 in February, from 6.3, adds to the evidence that the stronger dollar and weak overseas demand is holding back the factory sector.
- Nevertheless, mirroring the latest Empire State survey, the Philly Fed index still points to modest GDP growth of around 2%. Furthermore, we expect the actual outturn for GDP growth to be nearer 3%, with the domestic-focused construction and services sectors enjoying much stronger gains.
- The Philly Fed details were mixed, with new orders falling slightly, shipments rebounding sharply and employment also recovering after a poor showing in January. As with the Empire State, the best news in this survey is the jump in the future capital expenditure intentions index to 20.9, from 13.2. That suggests rising capex by manufacturers could go some way towards offsetting the decline in investment in the mining sector.
