Another Sign Manufacturing Sector's Leading Recovery: Philly Fed Index Positive for 6th Month

PHILADELPHIA FED -- "Manufacturing conditions continue to improve in the region, according to firms polled for this month's Business Outlook Survey. Indexes for general activity, new orders, shipments, and employment all remained positive this month and increased from their readings in January. Firms reported a notable pickup in new orders this month. Overall, firms remain generally optimistic about growth for the manufacturing sector over the next six months.

The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, increased from a reading of 15.2 in January to 17.6 this month. The index has now remained positive for six consecutive months (see chart above). There was a notable increase in the current new orders index suggesting an improvement in demand for manufactured goods - the new orders index increased 20 points. The current shipments index increased 9 points. The current inventory index increased 5 points, to its first positive reading since September 2007."

MP: Following 21 consecutive months of negative (or zero) readings from December 2007 to August 2009, the Philadelphia Manufacturing Index has been positive in every month since September 2009. Add this to the growing list of V-shaped signs of economic recovery.

Related: See today's WSJ article "Factories Get Set to Hire."