Philly Fed manufacturing grows as new orders and shipments hit two-year high

Manufacturing activity in Philadelphia rose to a three-month high in July, with new orders and shipments rising to their highest levels in more than two years, according to data released by the region's Federal Reserve Bank on Thursday.

The index for general activity in July's Manufacturing Business Outlook Survey increased to 13.9 this month with 39% of firms reporting growth in activity, compared with 25% reporting decreases and 29% experiencing no change.

That was up from just 1.3 in June and well ahead of the 2.9 reading expected by economists. This was also the second-highest reading for the index since April 2022.

"Most of the survey’s broad indicators for future activity rose, suggesting more widespread expectations for growth over the next six months," the report said.

The indices for new orders and shipments both turned positive following two straight readings under zero: the new orders index rose 23 points to 20.7 while the shipments index jumped 35 to 27.8 – their highest readings since the March and May of 2022, respectively.

Meanwhile, the net number of firms reporting an increasing in employment pushed into positive territory for the first time in nine months, with the employment index rising 18 points to 15.2 – its highest reading since October 2022.