Macro Flash Report


The first two April Fed Manufacturing Surveys, Empire (NY) and Philadelphia, are providing a continued signal of recovery in the manufacturing sector.

NY Empire & Philadelphia Fed Manufacturing Surveys

NY Empire showed some improvement in April, rising to -14.3 from -20.9 the previous month, yet still fell significantly short of market expectations, which anticipated a -5.2 reading. This marks the fifth consecutive month in contractionary territory, and the details reveal a deeper struggle:

  • Significant declines in shipments (-14.4 from -6.9), as well as a continuous contraction in unfilled orders (-10.1 from -10.9) and new orders (-16.2 from -17.2).
  • However, there were some minor positive shifts – delivery times shortened (-7.9 from -1) and inventories rose (3.4 from -12.9).
  • Labor market conditions remained fragile, with reductions in both employment levels (-5.1 from -7.1) and average hours worked (-10.6 from -10.4).
  • In terms of prices, input costs rose slightly (33.7 from 28.7), indicating increased inflationary pressures, while selling price inflation remained somewhat constant (16.9 from 17.8).
  • Despite the ongoing challenges, the outlook among businesses was cautiously optimistic. Firms maintained a subdued yet hopeful stance, expecting conditions to improve in the next six months (16.7 from 21.6). This sentiment underscores a persistent resilience in the sector, amidst prevailing economic headwinds.

Philadelphia April figures saw a significant uptick, surging 12 points to reach 15.5, far exceeding market expectations of a decline to 1.5 from the previous month’s 3.2. This marks the third consecutive expansionary reading and its highest level since April 2022, reflecting a robust improvement in activity.

  • The indicators that particularly highlighted this growth were the advancements in new orders (12.2 from 5.4) and shipments (19.1 from 11.4).
  • Despite these positive developments, the employment situation remained challenging, with weakening in both employment (-10.7 from -9.6) and average workweek (-18.7 from -0.2).
  • Price pressures also persisted, with prices paid (23 from 7) and prices received (5.5 from 4.6) indicating continued increases, adding to the inflationary environment.
  • Looking ahead, although the six-month expectation declined (34.3 from 38.6), it still pointed to growth, suggesting that firms remain optimistic about the sector’s trajectory despite some underlying challenges.