The extreme winter weather is to blame for a reduction in manufacturing activity in February, according to a regional economic survey that includes southern New Jersey.
The Federal Reserve Bank of Philadelphia February business outlook survey, released Thursday, reveals that an index that broadly measures manufacturing activity declined from a positive 9.4 in January to a negative 6.3 in February, the first negative reading in nine months.
The bank said comments from businesses responding to the survey "suggested that much of the weakness was attributable to the severe winter weather that affected the region during the survey period."
But, the outlook is brighter.
The survey found that "indicators of future activity improved this month, reflecting optimism about continued growth over the next six months."
When asked about underlying demand for their manufactured goods, 45 percent said demand is increasing while 19 percent said it was decreasing. Significantly more firms said their production will increase in the first quarter (55 percent) than would decrease (28 percent).
When it comes to employment, the survey shows a mixed picture. More firms (21 percent) reported increases in employment than decreases (16 percent). However, more than one-fifth of firms said they had reduced work hours.
According to the survey, "Employment among the firms continued to increase, and firms expect production to rise modestly during the first quarter," and the survey's indexes of future activity indicate “firms expect continued growth over the next six months.”
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