December 2013 Manufacturing growth in the region continued in December at a pace similar to that of November, according to firms responding to this month’s Business Outlook Survey. The survey’s broadest indicators for general activity, new orders, shipments, and employment were positive, signifying growth, and readings improved slightly in each category from November. The survey’s indicators of future activity moderated slightly but continue to suggest general optimism about growth over the next six months. Indicators Suggest Modest Expansion The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, was relatively unchanged from November to December, at 7.0 (see Chart). The index has now been positive for seven consecutive months. The percentage of firms reporting increased activity this month (29 percent) was greater than the percentage reporting decreased activity (22 percent). Both the current shipments and new orders indexes increased this month after falling in November. The demand for manufactured goods, as measured by the current new orders index, increased 4 points, to 15.4. Shipments continued to expand, and its index rose 8 points, to 13.3. Labor market indicators showed little improvement this month. The current employment index edged up 1 point from its reading in November, to 2.2. Seventeen percent of the firms reported increases in employment, compared with 13 percent last month. Firms, on balance, reported an increase in work hours, with the workweek index rebounding to 6.8 from -8.6 last month. Cost pressures moderated somewhat this month among reporting firms: The prices paid index decreased 10 points, to 20.1. With respect to prices received for manufactured goods, 17 percent of the firms reported higher prices, and 4 percent reported lower prices. The prices received index increased 3 points, to 12.9. Six-Month Indicators Moderate The survey’s future indicators have moderated in the past two months from their recent high in October but continue to suggest optimism among firms. The future general activity index edged down 2 points, to 44.0 (see Chart). Nearly 57 percent of the firms expect increases in activity over the next six months, whereas 13 percent of the firms indicated that they expect decreases over the next six months. The indexes for future new orders and shipments remained at relatively high levels but also edged down 3 points and 1 point, respectively. The future employment index fell 11 points but remained positive at 16.0, with nearly 27 percent of the firms expecting to increase employment over the next six months. Input and Labor Cost Expectations In this month’s special questions, firms were asked about their expectations for changes in various input and labor costs for the coming year (see Special Questions). Similar to responses in previous years, current responses indicate that the largest annual increase is expected to be for health benefits (7.9 percent). In contrast, other labor costs (wages and non-health-care benefits) are expected to rise only 2.3 percent and 1.9 percent, respectively. Firms were also asked how the expected cost increases will compare with 2013 costs. In every category, the share of firms indicating that their costs would be higher in 2014 was greater than the share reporting that their costs would be lower. Summary According to respondents to the December Business Outlook Survey, the region’s manufacturing sector continued to grow this month. Most broad indicators were little changed from the preceding month. Firms remained optimistic about future growth, although future indicators moderated slightly from readings in November. Special Questions(December 2013) 1. What percentage change in costs do you expect for the following categories in 2014? Energy Other Raw Intermediate Wages Health Nonhealth Materials Goods Benefits Benefits Decline of more than 4% 2.7 1.4 0.0 0.0 2.7 0.0 Decline of 3-4% 4.1 0.0 0.0 0.0 0.0 0.0 Decline of 2-3% 5.4 4.1 1.4 0.0 0.0 1.4 Decline of 1-2% 5.4 2.7 1.4 0.0 4.1 1.4 No Change 29.7 16.2 24.3 12.2 8.1 32.4 Increase of 1-2% 21.6 18.9 23.0 18.9 1.4 13.5 Increase of 2-3% 9.5 29.7 24.3 47.3 6.8 21.6 Increase of 3-4% 8.1 12.2 12.2 18.9 6.8 13.5 Increase of 4-5% 9.5 9.5 8.1 0.0 2.7 8.1 Increase of 5-7.5% 2.7 1.4 1.4 0.0 14.9 5.4 Increase of 7.5-10% 0.0 1.4 0.0 1.4 13.5 0.0 Increase of 10-12.5% 0.0 1.4 0.0 0.0 10.8 0.0 Increase of 12.5-15% 0.0 0.0 0.0 0.0 5.4 0.0 Increase of more than 15% 0.0 0.0 0.0 0.0 20.3 0.0 Avg. Expected Change 1.0 2.1 1.8 2.3 7.9 1.9 2. How do these expected costs compare with those in 2013? Energy Other Raw Intermediate Wages Health Nonhealth Materials Goods Benefits Benefits Higher 28.4 40.5 25.7 43.2 66.2 17.6 Same 52.7 50.0 60.8 50.0 20.3 70.3 Lower 16.2 8.1 6.8 4.1 12.2 5.4 * Percentages may not add to 100 percent because some reporters did not respond to the questions. Summmary of Returns December 2013 December vs. November Six Months from Now vs. December Prev. Prev. Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff. Index Index Index Index General Business 6.5 29.2 42.9 22.2 7.0 45.8 56.5 28.2 12.6 44.0 Conditions New Orders 11.8 35.4 43.3 20.0 15.4 47.5 55.5 31.5 10.5 45.0 Shipments 5.6 36.4 40.5 23.1 13.3 42.7 55.4 26.3 13.7 41.7 Unfilled Orders -4.2 19.3 54.9 24.3 -5.0 14.3 26.6 52.7 15.2 11.3 Delivery Times 3.2 11.0 67.7 20.0 -9.0 3.5 16.5 64.4 13.8 2.7 Inventories 15.3 27.2 60.5 12.3 14.8 4.5 24.9 51.9 23.2 1.7 Prices Paid 29.9 25.4 69.0 5.4 20.1 46.9 46.0 44.4 2.3 43.7 Prices Received 10.0 16.8 78.7 3.9 12.9 38.4 38.9 54.9 5.2 33.6 Number of Emp. 1.1 17.0 64.2 14.8 2.2 26.9 27.3 52.3 11.3 16.0 Avg. Emp. Wrkwk. -8.6 25.2 52.3 18.4 6.8 17.2 24.6 58.4 14.9 9.6 Capital Ex. -- -- -- -- -- 17.2 19.6 62.3 12.6 7.0 Notes: (1) Items may not add to 100 percent because of omission by respondents. (2) All data are seasonally adjusted. (3) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. (4) Survey data reflect information received through December 16, 2013. November 2013 Manufacturing growth in the region continued in November but did not match the pace of growth in the preceding month, according to firms responding to this month’s Business Outlook Survey. The survey’s broadest indicators for general activity, new orders, shipments, and employment were positive, signifying growth, but readings for each fell from October. The survey's indicators of future activity also moderated but continue to suggest general optimism about growth over the next six months. Indicators Suggest Modest Expansion The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, declined from 19.8 in October to 6.5 this month (see Chart). The index has now been positive for six consecutive months. The percentage of firms reporting increased activity this month (30 percent) was greater than the percentage reporting decreased activity (24 percent). Both the current shipments and new orders indexes remained positive but fell from their readings in October. The demand for manufactured goods, as measured by the current new orders index, decreased 16 points, to 11.8. Nearly 35 percent of the firms reported a rise in new orders, compared with 41 percent last month. Shipments continued to expand, but its index fell 15 points, to 5.6. Labor market indicators showed little improvement this month. The current employment index fell 14 points from its reading in October (which was at a two-year high), to 1.1. Nearly 13 percent of the firms reported increases in employment, which is lower than the 23 percent that reported increased employment last month. Firms, on balance, reported lower work hours, with the average workweek index falling from 8.5 to -8.6 this month. Cost pressures were slightly more widespread this month among reporting firms: The prices paid index increased 8 points, to 29.9. But with respect to prices received for manufactured goods, 15 percent of the firms reported higher prices, and 5 percent reported lower prices. The prices received index decreased 4 points, to 10.0. Six-Month Indicators Moderate The survey’s future indicators have recently suggested markedly improved optimism. This month, however, the future general activity index fell 15 points, to 45.8 (see Chart). Still, more than 55 percent of the firms expect increases in activity over the next six months; 10 percent of the firms indicated that they expect decreases over the next six months. The indexes for future new orders and shipments also remained at relatively high levels but fell 16 points and 11 points, respectively. The future employment index was virtually unchanged at 26.9, with nearly 35 percent of the firms expecting to increase employment over the next six months. Utilization Rate Restraining Capital Spending Plans For this month's special questions, manufacturers were asked about current capacity utilization rates compared with the same time last year, as well as their plans for capital spending (see Special Questions). The average capacity utilization rate among the firms polled was nearly 78 percent, which was an increase from the rate indicated one year earlier (76 percent). The share of firms expecting to increase their capital spending on plant and equipment (29 percent) next year was only slightly greater than the share planning reductions (23 percent). The current utilization rate among firms expecting to increase spending on plant and equipment (84 percent) was notably higher than those expecting to decrease spending (74 percent). Summary According to respondents to the November Business Outlook Survey, the region’s manufacturing sector continued to grow this month, although most broad indicators were lower than in the preceding month. Firms remained optimistic about future growth, although future indicators moderated from readings in October. Firms’ employment forecasts for the next six months remained optimistic, with more than one-third expecting to add workers. Special Questions (November 2013) 1. Which of the following best characterizes your plant’s current and past capacity utilization rate? Capacity Utilization Rate Current Same Time Last Year (% of reporters) (% of reporters) Less than 60% 9.6 6.7 60%-65% 8.2 12.0 65%-70% 8.2 10.7 70%-75% 20.6 21.3 75%-80% 9.6 16.0 80%-85% 12.3 10.7 85%-90% 11.0 12.0 90%-95% 11.0 6.7 95%-100% 9.6 4.0 N.R. 5.5 2.7 Average Utilization Rate* 77.8 75.6 2. Is your firm increasing or decreasing spending on plant and equipment over the next year? (% of reporters) Average Current Utilization Increasing 28.6 83.6 Decreasing 23.4 74.3 Same as 2013 45.5 75.7 N.R. 2.6 *Calculation based on industry-weighted responses. Summary of Returns November 2013 November vs. October Six Months from Now vs. November Prev. Prev. Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff. Index Index Index Index General Business 19.8 30.3 45.9 23.8 6.5 60.8 55.3 31.7 9.5 45.8 Conditions New Orders 27.5 34.9 42.0 23.1 11.8 63.7 55.5 35.9 8.0 47.5 Shipments 20.4 32.4 40.8 26.8 5.6 53.8 55.6 28.8 12.9 42.7 Unfilled Orders 9.1 16.1 63.4 20.3 -4.2 17.8 17.9 75.0 3.6 14.3 Delivery Times 6.1 15.7 69.7 12.5 3.2 -2.3 14.8 71.6 11.3 3.5 Inventories 7.3 30.5 51.8 15.2 15.3 9.4 22.2 56.1 17.7 4.5 Prices Paid 21.7 29.9 70.1 0.0 29.9 46.1 46.9 53.1 0.0 46.9 Prices Received 14.2 15.4 79.3 5.3 10.0 35.6 38.5 61.5 0.0 38.4 Number of Emp. 15.4 12.5 76.1 11.4 1.1 27.2 34.5 57.8 7.7 26.9 Avg. Emp. Wrkwk. 8.5 12.2 67.0 20.7 -8.6 9.3 27.2 61.1 10.0 17.2 Capital Ex. -- -- -- -- -- 23.4 25.5 58.5 8.3 17.2 Notes: (1) Items may not add to 100 percent because of omission by respondents. (2) All data are seasonally adjusted. (3) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. (4) Survey data reflect information received through November 18, 2013. October 2013 Manufacturing growth in the region continued in October, according to firms responding to this month’s Business Outlook Survey. The survey’s broadest indicators for general activity, new orders, shipments, and employment were positive, signifying growth. The survey's indicators of future activity suggest continued optimism about growth over the next six months. Indicators Suggest Continuing Expansion The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, edged down from 22.3 in September to 19.8 this month (see Chart). The index has now been positive for five consecutive months. The percentage of firms reporting increased activity this month (36 percent) was greater than the percentage reporting decreased activity (16 percent). The demand for manufactured goods, as measured by the current new orders index, increased 6 points, to 27.5, its highest reading since March 2011. Shipments continued to expand: The index fell 1 point to 20.4, following a 22 point increase last month. The diffusion indexes for inventories, delivery times, and unfilled orders were all positive and higher than last month. Labor market indicators showed improvement this month. The current employment index increased 5 points, to 15.4, its highest reading since May 2011. The percentage of firms reporting increases in employment (23 percent) exceeded the percentage reporting decreases (8 percent). Price Indexes Suggest Moderate Pressures The indexes for prices reflected moderate price pressures this month. Input price pressures were slightly less widespread this month: The prices paid index fell 4 points, to 21.7. With respect to prices received for manufactured goods, 21 percent of firms reported higher prices, and 7 percent reported lower prices. The prices received index increased 2 points, to 14.2. Six-Month Indicators Reflect Optimism The survey’s future indicators have suggested markedly improved optimism among the reporting manufacturers in recent months. The future general activity index increased 3 points, from 58.2 to 60.8, exceeding its previous highs since the end of the recession in 2009 (see Chart). Slightly over 63 percent of firms expect increases in activity over the next six months; only 2 percent of firms indicated that they expect decreases over the next six months. The indexes for future new orders and shipments also remained at relatively high levels. Over 67 percent of firms expect increases in new orders and 57 percent of firms expect increases in shipments over the next six months. The future employment index fell 4 points; however, nearly 37 percent of the firms expect to increase employment over the next six months. For this month's special questions, manufacturers were asked about changes in their workforce and the changing use of flexible workers over the past year (see Special Questions). The share of firms that increased their total workforce over the past year (51 percent) was significantly greater than those that decreased their workforce (27 percent), reflecting a marked improvement from when the question was asked last year. The mix of employment has changed for many firms. For example, 76 percent of firms indicated that they use part-time workers. Of this number, 15 percent of firms indicated that their share of the total part-time workforce has increased over the past year, whereas 5 percent of the firms decreased their share of these workers. Fewer firms use temporary/agency workers (65 percent) and contract workers (39 percent) compared with part-time workers. Among the firms that use temporary/agency and contract workers, these workers account for nearly 10 percent of their workforce. Summary According to respondents to the October Business Outlook Survey, the region’s manufacturing sector continued to grow this month. All the broad indicators were positive, with firms reporting improvements in new orders and hiring. Input price pressures were slightly less widespread this month. Firms’ outlook has shown notable improvement in recent months, with a majority of firms now expecting to expand manufacturing activity over the next six months and more than one-third expecting to add workers. Special Questions (October 2013) 1. Has your total workforce decreased, increased, or stayed the same over the past year? October 2013 October 2012 Decreased 27.2% 31.1% Stayed the same 20.0% 32.4% Increased 51.4% 32.4% No Response 1.4% 4.1% Total 100.0% 100.0% 2. Indicate whether over the past year the following categories of workers have increased as a share of your total workforce, decreased as a share of your total workforce, not changed as a share of your total workforce, or are not used at your firm. Percentage | Percentages That Use This | _____________________________ Type of Labor | Not Decreased No Increased Total |Used Share Change Share | Regular Full-Time 100.0 | 0.0 15.9 49.3 34.8 100.0 Regular Part-Time 76.1 | 23.9 4.5 56.7 14.9 100.0 Short-Term Workers 39.7 | 60.3 1.6 23.8 14.3 100.0 On-Call Workers 28.1 | 71.9 1.6 20.3 6.2 100.0 Temporary or Agency Workers 65.2 | 34.8 10.1 29.0 26.1 100.0 Independent Contract Workers 39.1 | 60.9 0.0 28.1 11.0 100.0 3. Approximately what percent of your total workforce is accounted for by temporary/agency workers and contract workers? Percentage of total workforce for those firms using these categories of workers ___________________________________ Average 9.5% Median 5.0% Summary of Returns October 2013 October vs. September Six Months from Now vs. October Prev. Prev. Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff. Index Index Index Index General Busines 22.3 36.0 46.6 16.3 19.8 58.2 63.1 34.6 2.3 60.8 Conditions New Orders 21.2 40.6 44.4 13.0 27.5 62.2 67.4 29.0 3.7 63.7 Shipments 21.2 36.1 47.0 15.7 20.4 58.3 56.9 40.0 3.1 53.8 Unfilled Orders 4.3 19.7 67.2 10.6 9.1 18.5 23.4 70.7 5.5 17.8 Delivery Times -1.2 13.5 77.8 7.4 6.1 8.3 8.3 81.1 10.6 -2.3 Inventories -1.8 22.8 58.4 15.4 7.3 13.6 26.6 54.4 17.2 9.4 Prices Paid 25.3 25.3 70.0 3.6 21.7 43.1 47.1 50.9 1.0 46.1 Prices Received 12.7 21.3 70.5 7.1 14.2 31.7 40.2 50.3 4.6 35.6 Number of Emp. 10.3 23.1 69.2 7.6 15.4 31.0 36.5 53.3 9.4 27.2 Avg. Emp. Wrkwk 12.2 22.4 61.7 14.0 8.5 16.2 25.4 58.5 16.1 9.3 Capital Ex. -- -- -- -- -- 27.7 34.8 53.1 11.3 23.4 Notes: (1) Items may not add to 100 percent because of omission by respondents. (2) All data are seasonally adjusted. (3) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. (4) Survey data reflect information received through October 15, 2013. September 2013 Manufacturing activity picked up in September, according to firms responding to this month’s Business Outlook Survey. The survey’s broadest indicators for general activity, new orders, shipments, and employment were all positive and higher than in August. The survey's indicators of future activity were significantly higher, suggesting improved optimism about growth over the next six months. Indicators Suggest Expansion The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 9.3 in August to 22.3 this month (see Chart). The index has now been positive for four consecutive months and is at its highest reading since March 2011. The percentage of firms reporting increased activity this month (36 percent) was greater than the percentage reporting decreased activity (14 percent). The demand for manufactured goods, as measured by the current new orders index, increased 16 points, to 21.2. Shipments rebounded from last month: The current shipments index increased 22 points. The diffusion indexes also suggest that, on balance, inventories and deliveries were near steady this month, while unfilled orders increased slightly. Labor market indicators showed improvement this month. The current employment index increased 7 points, to 10.3, its highest reading since April of last year. The percentage of firms reporting increases in employment (21 percent) exceeded the percentage reporting decreases (10 percent). Firms also reported a longer average workweek compared with last month, and the index increased 15 points, to 12.2. Price Indexes Suggest Moderate Pressures The indexes for prices paid for purchased inputs and for prices received for respondents’ own manufactured goods moved higher this month. The prices received index increased 3 points, to 12.7, but the increase was attributable to fewer firms reporting lower prices rather than more firms reporting price increases. With respect to their purchased inputs, the percentage of firms reporting higher prices increased from 24 percent last month to 32 percent this month. The prices paid index increased 8 points, to 25.3, its highest reading in 10 months. Six-Month Indicators Improve The survey’s future indicators suggest markedly improved optimism among the reporting manufacturers. The future general activity index increased from 38.9 to 58.2, exceeding its previous highs since the end of the recession in 2009 (see Chart). Slightly over 58 percent of firms expect increases in activity over the next six months; no firms indicated that they expect decreases over the next six months. The indexes for future new orders and shipments also improved, rising 23 and 18 points, respectively. The future employment index also increased 9 points. Over 37 percent of the firms expect to increase employment over the next six months. In supplemental questions, firms were asked to estimate their total production growth for the third quarter ending this month and expected growth for the fourth quarter (see Special Questions). Firms forecasting increases in third quarter production (56 percent) exceeded those forecasting decreases (29 percent). The calculated average production growth rate for the reporting group was an expected increase of nearly 1.6 percent. With regard to the fourth quarter, the percentage of firms expecting acceleration in the rate of their production growth (44 percent) was greater than the percentage expecting deceleration in growth (30 percent). Summary According to respondents to the September Business Outlook Survey, the region’s manufacturing sector continued to grow this month. All the broad indicators were positive, with firms reporting a pickup in general activity, new orders, shipments, and hiring. Price pressures were slightly more widespread this month, with more firms reporting higher prices for their purchased inputs. Firms’ outlook showed notable improvement this month, with a majority of firms now expecting to expand manufacturing activity over the next six months and one-third that expect to add workers. Special Questions (September 2013) 1. How will your firm’s total production for the third quarter compare with that of the second quarter? Expected Third Quarter Production Growth: % of firms Increase of more than 6% 12.5 Increase of 2-6% 20.0 Increase of less than 2% 23.8 Total increase 56.3% No change 13.8 Decrease of less than 2% 6.3 Decrease of 2-6% 11.3 Decrease of more than 6% 18.8 Total decrease 28.8% Average growth expected for all firms: 1.6%* 2. For the upcoming fourth quarter, what growth do you expect for production at your plant compared with third quarter growth? Significant acceleration 5.0 Some acceleration 21.3 Slight acceleration 17.5 Subtotal: Acceleraton 43.8% No change 25.0 Slight deceleration 11.3 Some deceleration 11.3 Significant deceleration 7.5 Subtotal: Deceleration: 30.1% *Firms provided more precise growth rates than shown in table. Percentages may not add to 100 percent because not all firms answered all questions. Summary of Returns September 2013 September vs. August Six Months from Now vs. September Prev. Prev. Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff. Index Index Index Index General Busines 9.3 36.2 50.0 13.8 22.3 38.9 58.2 36.8 0.0 58.2 Conditions New Orders 5.3 38.5 40.5 17.3 21.2 39.5 62.8 31.5 0.6 62.2 Shipments -0.9 37.2 44.6 16.0 21.2 40.1 59.9 32.9 1.6 58.3 Unfilled Orders -2.9 17.3 64.9 13.0 4.3 12.3 27.5 56.9 9.0 18.5 Delivery Times -9.0 12.9 70.4 14.1 -1.2 2.9 16.7 69.5 8.4 8.3 Inventories -11.3 21.7 50.5 23.5 -1.8 3.3 29.8 46.9 16.2 13.6 Prices Paid 17.3 31.7 60.5 6.4 25.3 38.7 44.6 46.9 1.5 43.1 Prices Received 9.9 15.9 80.2 3.1 12.7 23.0 32.3 60.3 0.6 31.7 Number of Emp. 3.5 20.7 68.3 10.4 10.3 22.3 37.2 50.5 6.2 31.0 Avg. Emp. Wrkwk -2.6 25.8 59.5 13.6 12.2 15.0 26.7 56.1 10.5 16.2 Capital Ex. -- -- -- -- -- 20.8 36.3 43.9 8.5 27.7 Notes: (1) Items may not add to 100 percent because of omission by respondents. (2) All data are seasonally adjusted. (3) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. (4) Survey data reflect information received through September 16, 2013. August 2013 Manufacturing firms responding to the August Business Outlook Survey indicated that regional manufacturing activity expanded this month. The survey's broadest indicators for general activity and new orders were positive for the third consecutive month, although they fell back from higher readings last month. Responses indicated flat shipments and only slight increases in overall employment this month. The survey's indicators of future activity, although not as high as in July, continue to suggest that firms expect continued growth over the next six months. Indicators Suggest Continued Growth The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 19.8 (its highest reading since March 2011) to 9.3 this month (see Chart). The index has now been positive for three consecutive months. The percentage of firms reporting increased activity this month (28 percent) was greater than the percentage reporting decreased activity (19 percent). Other current indicators suggest growth moderated this month. The demand for manufactured goods as measured by the current new orders index remained positive for the third consecutive month but fell 5 points to 5.3. The shipments index fell 15 points to just below zero, its first negative reading in three months. Both unfilled orders and delivery times indexes were negative this month, suggesting continued slack conditions. Labor market indicators showed only modest improvement this month. The current employment index, at 3.5, fell 4 points but has been slightly positive for two consecutive months. The percentage of firms reporting increases in employment (19 percent) exceeded the percentage reporting decreases (16 percent). Price Indexes Suggest Moderate Pressures The index for prices paid decreased, suggesting that price pressures are slightly less widespread compared with July. The prices paid index edged 4 points lower. Twenty-four percent of the firms reported higher prices for inputs this month, compared with 29 percent last month. Firms reported a rise in prices for their own manufactured goods: More firms reported price increases (17 percent) than reported decreases (8 percent), although 71 percent reported no change in prices. The prices received index increased 3 points. Six-Month Indicators Still Optimistic The survey's future indicators suggest continued optimism among the reporting manufacturers, although future indicators fell back from higher readings in July. The future activity index decreased 6 points from its reading in July but still remains well above its average readings over the past year (see Chart). Nearly 53 percent of firms are expecting increases in activity over the next six months. The future new orders and shipments indexes also fell back this month, decreasing 19 points and 11 points, respectively. The future employment index also weakened, falling 14 points. Nearly 29 percent of firms expect increases in employment over the next six months. In special questions this month, firms were asked about the importance of seasonal factors in production and the scheduling of summer production declines (see Special Questions). About 36 percent of firms indicated that they scheduled shutdowns or slowdowns during July this year, nearly the same that indicated shutdowns in July last year (35 percent). For July, the largest percentage of firms (23 percent) indicated that production decreases were about the same as in past years. The number of firms reporting that the July production decreases were greater than usual (8 percent) edged out the number indicating that decreases were less than usual (3 percent). However, far fewer (11 percent) scheduled production decreases in August, and this was notably less than the reported shutdowns in August 2012 (26 percent). Summary The August Business Outlook Survey indicates growth in manufacturing activity this month, with most broad indicators pointing to positive growth. However, employment growth is still lackluster. Firms’ responses suggest some deterioration of optimism this month, but the six-month indicators over the past two months remain well above those of the previous year. Summary of Returns August 2013 August vs. July Six Months from Now vs. August Prev. Prev. Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff. Index Index Index Index General Busines 19.8 27.9 53.5 18.6 9.3 44.9 52.6 30.7 13.8 38.9 Conditions New Orders 10.2 27.7 49.8 22.4 5.3 58.8 52.0 27.4 12.6 39.5 Shipments 14.3 26.0 46.5 26.9 -0.9 51.2 54.0 24.2 13.8 40.1 Unfilled Orders -1.8 15.1 65.5 18.1 -2.9 25.8 24.6 54.7 12.3 12.3 Delivery Times 0.5 14.2 62.6 23.2 -9.0 12.9 12.1 69.7 9.2 2.9 Inventories -21.6 17.7 53.4 28.9 -11.3 22.0 26.8 41.1 23.5 3.3 Prices Paid 21.5 23.9 65.5 6.6 17.3 42.1 39.4 53.9 0.7 38.7 Prices Received 7 17.4 70.8 7.5 9.9 23.9 27.1 60.0 4.1 23.0 Number of Emp. 7.7 19.2 65.0 15.8 3.5 36.2 28.8 58.8 6.5 22.3 Avg. Emp. Wrkwk 6.6 16.4 63.1 19.0 -2.6 14.6 28.6 50.4 13.6 15.0 Capital Ex. -- -- -- -- -- 27.7 27.9 57.7 7.0 20.8 Notes: (1) Items may not add to 100 percent because of omission by respondents. (2) All data are seasonally adjusted. (3) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. (4) Survey data reflect information received through August 13, 2013. Special Questions August 2013 1. Did you schedule plant shutdowns or production slowdowns during the summer months this year? July August Yes 36.3 11.3 No 62.5 81.3 NR 1.2 7.4 2. If yes, which of the following best characterizes your situation for this July and August? July August Production decreases greater than usual 7.5 5.0 Production decreases about the about the same as usual 22.5 5.0 Production decreases less than usual 2.5 0.0 NR 3.8 1.3 Total 36.3 11.3 Total (2012)* 35.4 26.2 * Percent of firms reporting seasonal-related shutdowns or slowdowns for respective months last year (based on August 2012 survey data). July 2013 Manufacturing firms responding to the July Business Outlook Survey indicated that regional manufacturing conditions improved this month. All of the survey’s broadest current indicators were positive, and most showed improvement from last month. The survey's indicators of future activity also showed a notable rise, suggesting that firms expect a pickup in business over the next six months. Indicators Suggest Pickup in Activity The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 12.5 in June to 19.8, its highest reading since March 2011 (see Chart). The percentage of firms reporting increased activity this month (37 percent) was greater than the percentage reporting decreased activity (17 percent). Other current indicators suggest continued growth this month. The shipments index increased notably, from 4.1 in June to 14.3. The demand for manufactured goods as measured by the current new orders index remained positive, although it fell back 6 points to 10.2. Firms reported a drawdown of inventories this month: The inventory index fell 15 points, from -6.6 to -21.6. Labor market conditions showed a notable improvement this month. The current employment index, at 7.7, registered its first positive reading in four months. The percentage of firms reporting increases in employment (18 percent) exceeded the percentage reporting decreases (10 percent). Firms also indicated an increase in the average workweek compared with June. Price Indexes Suggest Moderate Pressures With regard to purchased inputs, 29 percent of firms reported paying higher prices for inputs, while 8 percent reported lower input prices. The prices paid index edged down 1 point. The prices received index, reflecting firms’ own manufactured goods prices, decreased 8 points, to 7.0. Over 14 percent of the firms reported higher prices for their own manufactured goods, while 7 percent reported lower prices. Nearly 76 percent reported steady prices for their own products. Six-Month Indicators Improve The survey’s future indicators suggest improved optimism among the reporting manufacturers. The future activity index increased 11 points from its reading in June (see Chart). Nearly 52 percent of firms are expecting increases in activity over the next six months, up from 45 percent in June. The new orders and future shipments indexes improved, increasing 17 points and 14 points, respectively. The future employment index also improved this month, increasing 9 points. Nearly 41 percent of firms expect increases in employment over the next six months, compared with 33 percent last month. In special questions this month, firms were asked about the Affordable Care Act (ACA) and its effects on firms’ health insurance plans and workforce (see Special Questions). Over 70 percent of the surveyed firms indicated that they have not made or do not plan to make changes in their health insurance plans. Nearly 14 percent of the firms indicated they would be cutting back or dropping health insurance coverage, and 10 percent indicated that their firms were too small to be subject to the employer mandate. (All survey responses were received after the announcement earlier this month of a delay of the employer mandate until 2015.) With regard to workforce changes to date, 71 percent reported minimal or no changes related to the ACA. But 11 percent indicated there has been more outsourcing of work, and 6 percent indicated shifts from full-time to part-time workers attributable to the ACA. With regard to future workforce changes, 18 percent of firms indicated they would outsource more work over the next year, and 8 percent indicated they would substitute part-time workers for full-time workers. Summary The July Business Outlook Survey indicates a pickup of manufacturing activity this month, with most broad indicators, including employment, pointing to improvement over June. Firms’ responses suggest an improvement in the six-month outlook, and firms were more optimistic about adding to payrolls over the next six months. Special Questions July 2013 1. What changes, if any, have you made or do you plan to make to your firm's health plan in response to the requirements of the Affordable Care Act (ACA)? Please check all that apply. None. Our firm has fewer than 50 full-time employees (FTEs) to be subject to the employer mandate. 9.7% None. We already offer health insurance to our employees that satisfies the requirements of the ACA. 72.2% We are making our health insurance benefits more comprehensive to be compliant with the ACA. 2.8% We are expanding our health insurance coverage to all those working 30 hours or more per week. 4.2% We are cutting back or dropping health insurance. 13.9% Other 9.7% No Response 5.6% 2. What changes to your workforce, if any, have you already made in response to the ACA? Please check all that apply. Fire/refrain from hiring in order to keep payroll under 50 FTEs. 2.8% Shift from full-time to part-time workers. 5.6% More outsourcing of work. 11.1% Minimal or no changes in response to the ACA. 70.8% Other 9.7% No Response 8.3% 3. What changes to your workforce, if any, do you anticipate making over the next year in response to the ACA? Please check all that apply. Fire/refrain from hiring in order to keep payroll under 50 FTEs. 5.6% Shift from full-time to part-time workers. 8.3% More outsourcing of work. 18.1% Minimal or no changes in response to the ACA. 54.2% Other 12.5% No Response 9.7% Notes: (1) All responses were received after the announcement of a delay in deadline for the employer mandate until 2015. (2) The average size of the firms surveyed was 236 employees. (3) Percentages do not add to 100% due to multiple selections. Summary of Returns July 2013 July vs. June Six Months from Now vs. July Prev. Prev. Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff. Index Index Index Index General Busines 12.5 36.5 41.5 16.7 19.8 33.7 51.5 33.2 6.6 44.9 Conditions New Orders 16.6 35.1 35.6 24.9 10.2 41.5 59.6 32.2 0.8 58.8 Shipments 4.1 38.0 35.2 23.7 14.3 37.6 54.5 30.2 3.2 51.2 Unfilled Orders -7.9 14.7 67.5 16.4 -1.8 17.8 28.2 62.6 2.4 25.8 Delivery Times -9.3 12.5 70.8 12.0 0.5 4.8 13.7 73.3 0.7 12.9 Inventories -6.6 10.9 54.0 32.5 -21.6 0.4 31.4 46.3 9.4 22.0 Prices Paid 22.5 29.2 61.7 7.7 21.5 26.4 44.7 42.7 2.6 42.1 Prices Received 14.6 14.2 75.7 7.3 7.0 23.5 29.1 56.2 5.2 23.9 Number of Emp. -5.4 17.9 69.7 10.2 7.7 27.3 40.5 47.1 4.3 36.2 Avg. Emp. Wrkwk 0.8 21.5 57.2 15.0 6.6 7.5 26.4 54.2 11.8 14.6 Capital Ex. -- -- -- -- -- 27.3 34.4 52.0 6.7 27.7 Notes: (1) Items may not add to 100 percent because of omission by respondents. (2) All data are seasonally adjusted. (3) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. (4) Survey data reflect information received through July 16, 2013. June 2013 Manufacturing firms responding to the monthly Business Outlook Survey indicated that regional manufacturing activity increased this month. Most of the survey’s broadest current indicators were positive this month, suggesting an improvement in business conditions. The survey's indicators of future activity continue to suggest that firms expect growth over the next six months. Indicators Suggest Improvement The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from -5.2 in May to 12.5, its highest reading since April 2011 (see Chart). The percentage of firms reporting increased activity this month (34 percent) was greater than the percentage reporting decreased activity (22 percent). Other current indicators showed similar notable improvement this month. The demand for manufactured goods as measured by the current new orders index increased, from -7.9 to 16.6. The shipments index also moved back into positive territory, rising 13 points to 4.1. Labor market conditions showed continued weakness, however, with indexes suggesting lower employment among the reporting manufacturers. Although it increased 3 points to -5.4, the employment index remained negative for the third consecutive month. The percentage of firms reporting employment decreases (20 percent) exceeded the percentage reporting increases (15 percent). Price Indexes Move Higher This Month The survey’s indexes for prices paid and received rose notably this month. With regard to purchased inputs, 28 percent of firms reported paying higher prices for inputs, while 6 percent reported lower input prices. The prices paid index increased nearly 16 points to its highest reading in six months. The prices received index, reflecting firms’ own manufactured goods prices, increased 18 points, to 14.6. The percentage of firms reporting higher prices for their own manufactured goods rose from 7 percent in May to 20 percent this month. Still, the largest share of firms, 76 percent, reported steady prices. Six-Month Indicators Improve The survey’s future indicators suggest continued optimism among the reporting manufacturers. The future activity index increased slightly (1 point) from its reading in May (see Chart). The percentage of firms expecting increases in activity over the next six months (45 percent) exceeded the percentage expecting decreases (12 percent) by a significant margin. The future shipments and new orders indexes improved, increasing 6 points and 7 points, respectively. The future employment index also improved this month, increasing 17 points. Thirty-three percent of firms expect increases in employment over the next six months compared with 24 percent last month. In special questions this month, firms were asked to characterize their plans for production and employment increases over the next six months (see Special Questions). The firms were nearly evenly divided between those expecting production increases (49 percent) and those expecting not to increase production (51 percent). Twenty-five percent of the firms indicated they were expecting production increases and would be hiring additional workers over the next six months. The remaining firms that expect production increases indicated that this would be accomplished by increasing either work hours (12 percent) or productivity (7 percent). For the firms not currently expecting production increases, a larger percentage indicated that increasing production could be accomplished by increasing work hours (17 percent) or productivity (12 percent), rather than increasing employment (11 percent). Summary The June Business Outlook Survey indicates an expansion of activity this month, with all of the broad indicators — except for employment — recording notable improvement over May. Firms reported higher prices for inputs and their own manufactured goods this month. Firms continue to expect positive growth over the next six months and were relatively more optimistic about adding to payrolls. Special Questions (June 2013) 1. Which of the following best characterizes your short-run production and employment situation? We expect to increase production over the next six months 49.3% We do not expect to increase production over the next six months 50.7% 2. If your firm were to increase production over the next six months (even if it is not currently expected), this would be accomplished by: Planning to Not planning to increase increase production by: production, Total but could by: Adding additional workers 25.3% 10.7% 36.0% Increasing work hours 12.0% 17.3% 29.3% Increasing worker productivity 6.7% 12.0% 18.7% Other 5.3% 2.7% 8.0% NR 0.0% 8.0% 8.0% Totals 49.3% 50.7% 100.0 % Summary of Returns June 2013 June vs. May Six Months from Now vs. June Prev. Prev. Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff. Index Index Index Index General Busines -5.2 33.9 44.6 21.5 12.5 32.3 45.4 40.2 11.7 33.7 Conditions New Orders -7.9 38.2 40.2 21.6 16.6 34.5 53.0 30.5 11.5 41.5 Shipments -8.5 31.3 41.6 27.2 4.1 31.7 51.3 26.7 13.7 37.6 Unfilled Orders -9.3 15.5 58.6 23.4 -7.9 16.9 27.5 53.8 9.7 17.8 Delivery Times -6.0 10.7 69.2 20.0 -9.3 1.9 15.4 66.2 10.6 4.8 Inventories 4.1 19.8 53.1 26.5 -6.6 -1.3 23.0 48.7 22.6 0.4 Prices Paid 6.9 28.2 65.7 5.7 22.5 30.7 33.5 55.9 7.1 26.4 Prices Received -3.3 19.6 75.5 4.9 14.6 18.2 30.2 52.7 6.7 23.5 Number of Emp. -8.7 14.8 61.9 20.2 -5.4 10.0 33.2 50.6 5.9 27.3 Avg. Emp. Wrkwk -12.4 18.8 61.5 18.0 0.8 14.1 18.0 55.6 10.6 7.5 Capital Ex. -- -- -- -- -- 11.5 34.7 42.2 7.4 27.3 Notes: (1) Items may not add to 100 percent because of omission by respondents. (2) All data are seasonally adjusted. (3) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. (4) Survey data reflect information received through June 17, 2013. May 2013 Manufacturing firms responding to the monthly Business Outlook Survey suggest that regional manufacturing activity weakened this month. All of the survey’s broadest current indicators were negative this month, indicating weaker conditions compared with April. The survey's indicators of future activity improved, however, and suggest that firms expect overall growth over the next six months. Indicators Suggest Weakening The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 1.3 in April to -5.2 this month. The current activity index has shown no pattern of sustained growth over the past seven months, generally alternating between positive and negative readings (see Chart). The number of firms reporting decreased activity this month (29 percent) edged out those reporting increased activity (24 percent). Other current indicators showed similar weakness this month. The demand for manufactured goods remained weak, with the current new orders index declining from -1.0 to -7.9. The shipments index also indicated weakness, decreasing more sharply from 9.1 to -8.5. Firms reported a notable increase in inventories this month: The current inventories index increased from -22.2 to 4.1. Labor market conditions showed continued weakness, with indexes suggesting lower employment overall. The employment index decreased 2 points to -8.7, its second consecutive negative reading. The percentage of firms reporting employment decreases (22 percent) exceeded the percentage reporting increases (14 percent). The workweek index declined 10 points to -12.4, remaining negative for the fifth consecutive month. Price Pressures Remain Muted The survey’s price indexes suggest continued moderation in price pressures. With regard to purchased inputs, 18 percent of firms reported paying higher prices for inputs, while 11 percent reported lower input prices. The prices paid index edged 4 points higher than in April, which was its lowest reading since July 2009. The prices received index increased 4 points, to -3.3. The percentage of firms reporting lower prices for their own manufactured goods (10 percent) exceeded the percentage reporting higher prices (7 percent) for the fifth consecutive month. Six-Month Indicators Improve Notably The survey’s future indicators suggest improved optimism among the reporting manufacturers. The future activity index increased from 19.5 to 32.3, returning to near its level in March (see Chart). The percentage of firms expecting increases in activity over the next six months (45 percent) exceeded the percentage expecting decreases (12 percent) by a significant margin. The indexes for future new orders and shipments also improved, increasing 10 and 5 points, respectively. The future employment index also improved, increasing 2 points, a more modest increase than the other broader future indicators. Twenty-four percent of firms expect increases in employment over the next six months; 14 percent expect decreases. In special questions this month, firms were asked about their current inventory situation (see Special Questions). About 58 percent of firms indicated that their inventories were about right for current conditions. On balance, inventories are expected to fall in the second quarter: Nearly 26 percent of firms expect inventories to fall; 8 percent expect them to rise. Firms perceived little change in their customers’ inventory plans in recent months. The majority (54 percent) indicated no change in their customers’ inventory plans, and the share reporting decreases (12 percent) was near the share reporting increases (8 percent). Summary The May Business Outlook Survey indicates some weakening of activity this month, with all of the broad indicators recording negative diffusion indexes. The survey’s indicators have failed to exhibit any sustained pattern of growth in recent months. The indicators for general activity, new orders, and shipments suggest weaker conditions this month, and firms reported employment reductions. Price pressures continue to be modest. Despite weaker current indicators, firms continue to expect positive growth over the next six months. June 2013 Manufacturing firms responding to the monthly Business Outlook Survey indicated that regional manufacturing activity increased this month. Most of the survey’s broadest current indicators were positive this month, suggesting an improvement in business conditions. The survey's indicators of future activity continue to suggest that firms expect growth over the next six months. Indicators Suggest Improvement The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from -5.2 in May to 12.5, its highest reading since April 2011 (see Chart). The percentage of firms reporting increased activity this month (34 percent) was greater than the percentage reporting decreased activity (22 percent). Other current indicators showed similar notable improvement this month. The demand for manufactured goods as measured by the current new orders index increased, from -7.9 to 16.6. The shipments index also moved back into positive territory, rising 13 points to 4.1. Labor market conditions showed continued weakness, however, with indexes suggesting lower employment among the reporting manufacturers. Although it increased 3 points to -5.4, the employment index remained negative for the third consecutive month. The percentage of firms reporting employment decreases (20 percent) exceeded the percentage reporting increases (15 percent). Price Indexes Move Higher This Month The survey’s indexes for prices paid and received rose notably this month. With regard to purchased inputs, 28 percent of firms reported paying higher prices for inputs, while 6 percent reported lower input prices. The prices paid index increased nearly 16 points to its highest reading in six months. The prices received index, reflecting firms’ own manufactured goods prices, increased 18 points, to 14.6. The percentage of firms reporting higher prices for their own manufactured goods rose from 7 percent in May to 20 percent this month. Still, the largest share of firms, 76 percent, reported steady prices. Six-Month Indicators Improve The survey’s future indicators suggest continued optimism among the reporting manufacturers. The future activity index increased slightly (1 point) from its reading in May (see Chart). The percentage of firms expecting increases in activity over the next six months (45 percent) exceeded the percentage expecting decreases (12 percent) by a significant margin. The future shipments and new orders indexes improved, increasing 6 points and 7 points, respectively. The future employment index also improved this month, increasing 17 points. Thirty-three percent of firms expect increases in employment over the next six months compared with 24 percent last month. In special questions this month, firms were asked to characterize their plans for production and employment increases over the next six months (see Special Questions). The firms were nearly evenly divided between those expecting production increases (49 percent) and those expecting not to increase production (51 percent). Twenty-five percent of the firms indicated they were expecting production increases and would be hiring additional workers over the next six months. The remaining firms that expect production increases indicated that this would be accomplished by increasing either work hours (12 percent) or productivity (7 percent). For the firms not currently expecting production increases, a larger percentage indicated that increasing production could be accomplished by increasing work hours (17 percent) or productivity (12 percent), rather than increasing employment (11 percent). Summary The June Business Outlook Survey indicates an expansion of activity this month, with all of the broad indicators — except for employment — recording notable improvement over May. Firms reported higher prices for inputs and their own manufactured goods this month. Firms continue to expect positive growth over the next six months and were relatively more optimistic about adding to payrolls. Special Questions (June 2013) 1. Which of the following best characterizes your short-run production and employment situation? We expect to increase production over the next six months 49.3% We do not expect to increase production over the next six months 50.7% 2. If your firm were to increase production over the next six months (even if it is not currently expected), this would be accomplished by: Planning to Not planning to increase increase production by: production, Total but could by: Adding additional workers 25.3% 10.7% 36.0% Increasing work hours 12.0% 17.3% 29.3% Increasing worker productivity 6.7% 12.0% 18.7% Other 5.3% 2.7% 8.0% NR 0.0% 8.0% 8.0% Totals 49.3% 50.7% 100.0 % Summary of Returns June 2013 June vs. May Six Months from Now vs. June Prev. Prev. Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff. Index Index Index Index General Busines -5.2 33.9 44.6 21.5 12.5 32.3 45.4 40.2 11.7 33.7 Conditions New Orders -7.9 38.2 40.2 21.6 16.6 34.5 53.0 30.5 11.5 41.5 Shipments -8.5 31.3 41.6 27.2 4.1 31.7 51.3 26.7 13.7 37.6 Unfilled Orders -9.3 15.5 58.6 23.4 -7.9 16.9 27.5 53.8 9.7 17.8 Delivery Times -6.0 10.7 69.2 20.0 -9.3 1.9 15.4 66.2 10.6 4.8 Inventories 4.1 19.8 53.1 26.5 -6.6 -1.3 23.0 48.7 22.6 0.4 Prices Paid 6.9 28.2 65.7 5.7 22.5 30.7 33.5 55.9 7.1 26.4 Prices Received -3.3 19.6 75.5 4.9 14.6 18.2 30.2 52.7 6.7 23.5 Number of Emp. -8.7 14.8 61.9 20.2 -5.4 10.0 33.2 50.6 5.9 27.3 Avg. Emp. Wrkwk -12.4 18.8 61.5 18.0 0.8 14.1 18.0 55.6 10.6 7.5 Capital Ex. -- -- -- -- -- 11.5 34.7 42.2 7.4 27.3 Notes: (1) Items may not add to 100 percent because of omission by respondents. (2) All data are seasonally adjusted. (3) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. (4) Survey data reflect information received through June 17, 2013. May 2013 Manufacturing firms responding to the monthly Business Outlook Survey suggest that regional manufacturing activity weakened this month. All of the survey’s broadest current indicators were negative this month, indicating weaker conditions compared with April. The survey's indicators of future activity improved, however, and suggest that firms expect overall growth over the next six months. Indicators Suggest Weakening The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 1.3 in April to -5.2 this month. The current activity index has shown no pattern of sustained growth over the past seven months, generally alternating between positive and negative readings (see Chart). The number of firms reporting decreased activity this month (29 percent) edged out those reporting increased activity (24 percent). Other current indicators showed similar weakness this month. The demand for manufactured goods remained weak, with the current new orders index declining from -1.0 to -7.9. The shipments index also indicated weakness, decreasing more sharply from 9.1 to -8.5. Firms reported a notable increase in inventories this month: The current inventories index increased from -22.2 to 4.1. Labor market conditions showed continued weakness, with indexes suggesting lower employment overall. The employment index decreased 2 points to -8.7, its second consecutive negative reading. The percentage of firms reporting employment decreases (22 percent) exceeded the percentage reporting increases (14 percent). The workweek index declined 10 points to -12.4, remaining negative for the fifth consecutive month. Price Pressures Remain Muted The survey’s price indexes suggest continued moderation in price pressures. With regard to purchased inputs, 18 percent of firms reported paying higher prices for inputs, while 11 percent reported lower input prices. The prices paid index edged 4 points higher than in April, which was its lowest reading since July 2009. The prices received index increased 4 points, to -3.3. The percentage of firms reporting lower prices for their own manufactured goods (10 percent) exceeded the percentage reporting higher prices (7 percent) for the fifth consecutive month. Six-Month Indicators Improve Notably The survey’s future indicators suggest improved optimism among the reporting manufacturers. The future activity index increased from 19.5 to 32.3, returning to near its level in March (see Chart). The percentage of firms expecting increases in activity over the next six months (45 percent) exceeded the percentage expecting decreases (12 percent) by a significant margin. The indexes for future new orders and shipments also improved, increasing 10 and 5 points, respectively. The future employment index also improved, increasing 2 points, a more modest increase than the other broader future indicators. Twenty-four percent of firms expect increases in employment over the next six months; 14 percent expect decreases. In special questions this month, firms were asked about their current inventory situation (see Special Questions). About 58 percent of firms indicated that their inventories were about right for current conditions. On balance, inventories are expected to fall in the second quarter: Nearly 26 percent of firms expect inventories to fall; 8 percent expect them to rise. Firms perceived little change in their customers’ inventory plans in recent months. The majority (54 percent) indicated no change in their customers’ inventory plans, and the share reporting decreases (12 percent) was near the share reporting increases (8 percent). Summary The May Business Outlook Survey indicates some weakening of activity this month, with all of the broad indicators recording negative diffusion indexes. The survey’s indicators have failed to exhibit any sustained pattern of growth in recent months. The indicators for general activity, new orders, and shipments suggest weaker conditions this month, and firms reported employment reductions. Price pressures continue to be modest. Despite weaker current indicators, firms continue to expect positive growth over the next six months. Special Questions (May 2013) 1. Choose the statement that best characterizes your current inventory situation. Inventories are: % of respondents About right for current economic conditions 58.1 Too high and are expected to decrease in the second quarter 25.6 Too low and are expected to decrease in the second quarter 0.0 Too low and are expected to increase in the second quarter 4.7 Too high and are expected to increase in the second quarter 3.5 2. Over the past several months, did your customers' inventory plans: % of respondents Increase 8.1 Not change 53.5 Decrease 11.6 Note: Percentages may not add to 100% because of no responses for some questions. Summary of Returns May 2013 May vs. April Six Months from Now vs. May Prev. Prev. Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff. Index Index Index Index General Busines 1.3 23.8 41.8 29.0 -5.2 19.5 44.5 36.3 12.2 32.3 Conditions New Orders -1.0 27.4 33.5 35.3 -7.9 24.3 47.2 34.2 12.7 34.5 Shipments 9.1 23.9 39.3 32.4 -8.5 26.5 47.1 29.1 15.4 31.7 Unfilled Orders -8.7 12.6 60.5 21.9 -9.3 -2.1 24.4 61.7 7.5 16.9 Delivery Times -13.8 10.2 68.3 16.2 -6.0 -4.5 12.1 69.4 10.2 1.9 Inventories -22.2 25.3 52.2 21.2 4.1 -13.3 19.6 55.2 20.8 -1.3 Prices Paid 3.1 18.1 69.2 11.2 6.9 26.6 36.8 51.9 6.0 30.7 Prices Received -7.5 7.0 81.3 10.3 -3.3 8.3 24.5 63.4 6.3 18.2 Number of Emp. -6.8 13.7 63.9 22.4 -8.7 8.2 23.9 56.8 14.0 10.0 Avg. Emp. Wrkwk -2.1 14.7 54.7 27.2 -12.4 6.6 26.4 53.9 12.3 14.1 Capital Ex. -- -- -- -- -- 7.8 25.4 52.4 13.9 11.5 Notes: (1) Items may not add to 100 percent because of omission by respondents. (2) All data are seasonally adjusted. (3) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. (4) Survey data reflect information received through May 14, 2013. April 2013 Manufacturers responding to the Business Outlook Survey reported near steady business activity in April. The indicator for overall activity remained slightly positive this month, but other broad indicators were mixed. Indicators for new orders and em-ployment were weaker this month. The survey's broad indicators of future activity suggest that firms expect continued growth, but optimism waned compared with last month. Indicators Suggest Steady Activity The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, was 1.3, just slightly lower than the reading of 2.0 in March (see Chart). The number of firms reporting increased activity this month (22 percent) edged out those reporting decreased activity (21 percent). The demand for manufactured goods remained weak, with the current new orders index declining from 0.5 to -1.0. The shipments index showed continued improvement, however: The index remained positive and edged six points higher, to 9.1, its highest reading in four months. Nearly 28 percent of the firms reported an increase in shipments; 19 percent reported a decrease. Firms reported a notable decrease in inventories this month: The current inventories index fell from zero to -22.2. Labor market conditions showed continued signs of weakness, with indexes suggesting lower employment overall. The em-ployment index decreased from 2.7 in March to -6.8 this month, its first negative reading in three months. The percentage of firms reporting employment decreases (17 percent) exceeded the percentage reporting increases (10 percent). The workweek index remained negative for the fourth consecutive month. Indexes Indicate Reduced Price Pressures The survey’s price indexes suggest diminished price pressures this month. With regard to purchased inputs, 14 percent of firms reported paying higher prices for inputs, while 11 percent reported lower input prices. The prices paid index edged 5 points lower and is now at its lowest reading since July 2009. The prices received index fell 7 points, to -7.5. The percentage of firms reporting lower prices for their own manufactured goods (12 percent) exceeded the percentage reporting higher prices (5 percent) for the fourth consecutive month. Six-Month Indicators Fall Back Most of the survey’s future indicators suggest diminished optimism this month. The future general activity index fell notably from 32.5 to 19.5 (see Chart). The percentage of firms expecting increases in activity over the next six months (37 percent) still exceeded the percentage expecting decreases (17 percent) by a significant margin. The indexes for future new orders and ship-ments also weakened, falling 10 and 5 points, respectively. The future employment index, however, was virtually unchanged this month. Twenty-four percent of firms expect to increase employment over the next six months; 16 percent expect to decrease it. For this month’s special questions, firms were asked about the trend of underlying demand for their products over the last three months (see Special Questions). On balance, firms indicated modest improvement in demand: 55 percent of the firms indicated increases in demand over the past three months, while 29 percent indicated decreases. When asked how current demand compares with what was expected three months earlier, nearly 44 percent of the firms indicated that it was greater than expected. When asked about uncertainty and hiring, more firms (65 percent) indicated demand uncertainty as the most important factor adversely influencing hiring, while 18 percent reported regulatory uncertainty. Summary The April Business Outlook Survey indicates essentially flat growth in the region’s manufacturing sector this month. The indi-cators for general activity and new orders remained near their levels in March, but shipments showed some improvement. Employment levels edged lower, however. Although firms expect continued growth over the next six months, the survey’s measures of overall expectations suggest diminished optimism this month. Firms continue to indicate modest hiring plans. Special Questions (April 2013) 1. Over the past three months, how would you characterize the underlying demand for your manufactured products? Exclude any purely seasonal effect. Increased significantly 5.0% Increased moderately 50.0% subtotal 55.0% No change 15.0% Decreased moderately 25.0% Decreased significantly 3.8% subtotal 28.8% 2. How does the current underlying demand for your products compare to what you expected three months ago? Less than expected 25.0% About what was expected 28.8% Greater than expected 43.8% NR 1.3% 3. Is uncertainty about demand or regulatory policies the most important factor adversely influencing your hiring? Demand uncertainty is the most important factor 65.0% Regulatory uncertainty is the most important factor 17.5% Neither demand nor regulatory uncertainty is the most important factor 12.5% Items may not add to 100 percent because of omission by respondents. Summary of Returns April 2013 April vs. March Six Months from now vs. April Prev. Prev. Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff. Index Index Index Index General Busines 2.0 22.3 51.5 21.0 1.3 32.5 36.8 36.6 17.2 19.5 Conditions New Orders 0.5 23.8 51.3 24.9 -1.0 34.5 45.0 25.9 20.7 24.3 Shipments 3.5 27.9 53.3 18.8 9.1 31.2 45.1 30.1 18.6 26.5 Unfilled Orders -6.4 13.5 61.1 22.3 -8.7 6.6 14.1 58.7 16.2 -2.1 Delivery Times -7.5 6.4 73.3 20.3 -13.8 2.2 10.8 68.6 15.2 -4.5 Inventories 0.0 12.0 50.7 34.1 -22.2 -5.6 13.8 47.4 27.1 -13.3 Prices Paid 8.5 13.6 75.6 10.5 3.1 30.9 35.9 48.8 9.3 26.6 Prices Received -0.8 4.8 81.5 12.3 -7.5 16.6 17.4 67.2 9.0 8.3 Number of Emp. 2.7 10.4 71.5 17.3 -6.8 8.1 24.4 50.8 16.2 8.2 Avg. Emp. Wrkwk -12.9 18.2 56.4 20.4 -2.1 3.4 21.3 57.7 14.7 6.6 Capital Ex. -- -- -- -- -- 6.8 25.3 45.2 17.4 7.8 Notes: (1) Items may not add to 100 percent because of omission by respondents. (2) All data are seasonally adjusted. (3) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. (4) Survey data reflect information received through April 16, 2013. March 2013 Manufacturers responding to the March Business Outlook Survey reported slight increases in business activity this month. Indicators for general activity and new orders increased notably, following negative readings over the previous two months. Indicators for shipments and employment remained positive and improved slightly this month. Changes in the survey's broad indicators of future activity were mixed but continued to reflect general optimism about growth over the next six months. Indicators Suggest Increased Activity The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from a reading of -12.5 in February to 2.0 this month (see Chart). The demand for manufactured goods also showed improvement this month: The new orders index increased from a reading of -7.8 in February to 0.5, its first positive reading in three months. The shipments index showed continued improvement: The index remained positive and edged higher to 3.5. The percentage of firms reporting increased shipments (25 percent) was still only slightly greater than the percentage reporting declines (22 percent). Labor market conditions showed continued signs of stability, but little overall growth. The employment index increased from 0.9 in February to 2.7 this month, its second consecutive positive reading. The percentage of firms reporting employment increases (17 percent) narrowly exceeded the percentage reporting decreases (14 percent). Firms also reported a decline of average work hours this month. The workweek index declined 11 points. Indexes Indicate Little Price Pressure The survey’s price indexes suggest little price pressures again this month. For the third consecutive month, the prices received index was slightly negative. The percentage of firms reporting lower prices for their own manufactured goods (9 percent) exceeded by a slim margin the percentage reporting higher prices (8 percent). With regard to purchased inputs, 17 percent of firms reported paying higher prices for inputs, compared with 13 percent last month. The prices paid index edged slightly lower and is now at its lowest reading in nine months. Six-Month Indicators Improve The survey’s future indicators suggest that firms expect growth in business over the next six months. The future general activity index increased slightly from a reading of 32.1 to 32.5, its fourth consecutive monthly increase (see Chart). The percentage of firms expecting increases in activity over the next six months (46 percent) exceeded the percentage expecting decreases (13 percent). The indexes for future new orders and shipments showed a mixed pattern this month. The future new orders index decreased 4 points, while the future shipments index increased 1 point. The future employment index fell notably, from 14.9 to 8.1. Twenty-four percent of firms expect to increase employment over the next six months; 16 percent expect to decrease it. In special questions this month, firms were asked about their expectations for capital spending for 2013 compared with 2012 (see Special Questions). Over 39 percent of the firms indicated that total capital spending would increase this year compared with 2012; 32 percent indicated that spending would decrease. With the exception of noncomputer equipment, most categories of planned capital spending were being scaled back this year. Among firms that did not plan to increase capital spending, the most cited reasons were low sales growth, low capacity utilization, and limited need to replace capital and technology equipment. Summary The March Business Outlook Survey indicated an improvement in the region’s manufacturing sector this month. Most notably, the indicators for general activity and new orders improved markedly, and the survey broadly recorded positive readings this month. Responses suggest that firms expect further increases in business over the next six months. Although firms are generally optimistic, restrained capital spending plans are in evidence. Special Questions (March 2013) 1. Do you expect the following capital spending categories in 2013 to increase, decrease, or stay the same as last year? Increase Decrease No Change Diffusion Index % % % (Increase - Decrease) % Total capital spending 39.4 31.8 28.8 7.6 Noncomputer equipment 39.4 27.3 33.3 12.1 Software 22.7 30.3 47.0 -7.6 Computer and related hardware 16.7 24.3 59.1 -7.6 Energy saving investments 9.1 27.3 62.1 -18.2 Structures 13.6 31.8 53.0 -18.2 2. If you do not plan to increase total capital spending, what are the major factors behind your plan not to increase capital spending? * % Expected growth of sales is low 54.0 Capacity utilization is currently low 46.0 Limited need to replace other capital good 43.0 Limited need to replace information technology equipment 41.0 Firm’s cash flow or balance-sheet position has deteriorated 16.0 Outsourcing 11.0 Cost or availability of external finance has deteriorated 5.0 * Percentages may add to greater than 100 because firms were asked to indicate more than one factor if applicable. Summary of Returns March 2013 March vs. February Six Months from now vs. March Prev. Prev. Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff. Index Index Index Index General Busines -12.5 25.4 49.8 23.4 2.0 32.1 45.9 36.1 13.4 32.5 Conditions New Orders -7.8 23.6 51.5 23.2 0.5 38.0 48.6 34.1 14.1 34.5 Shipments 2.4 24.9 53.6 21.5 3.5 30.3 49.0 32.3 17.8 31.2 Unfilled Orders -11.2 13.8 63.4 20.2 -6.4 4.3 19.0 61.3 12.4 6.6 Delivery Times 0.2 4.4 81.4 11.9 -7.5 -0.4 14.8 62.4 12.6 2.2 Inventories -10.0 18.6 61.6 18.6 0.0 -2.6 19.8 46.1 25.5 -5.6 Prices Paid 8.9 17.1 73.5 8.7 8.5 26.4 34.7 55.9 3.8 30.9 Prices Received -0.5 7.9 78.4 8.7 -0.8 25.4 24.2 61.4 7.7 16.6 Number of Emp. 0.9 16.7 68.7 14.1 2.7 14.9 24.3 51.5 16.2 8.1 Avg. Emp. Wrkwk -1.6 6.5 72.3 19.5 -12.9 6.5 16.6 62.9 13.2 3.4 Capital Ex. -- -- -- -- -- 15.7 19.6 55.4 12.8 6.8 Notes: (1) Items may not add to 100 percent because of omission by respondents. (2) All data are seasonally adjusted. (3) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. (4) Survey data reflect information received through March 18, 2013. February 2013 Manufacturers responding to the February Business Outlook Survey reported declines in activity this month. Following reported growth in late 2012, indicators for general activity and new orders have now registered negative readings for the past two months. However, indicators for shipments and employment were slightly positive this month. The survey's broad indicators of future activity edged higher this month. Indicators Suggest Decline in Activity The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from a reading -5.8 in January to -12.5 this month (see Chart). The demand for manufactured goods also showed slight declines this month: The new orders index declined from a reading of -4.3 in January to -7.8 in February. Despite negative readings for general activity and new orders, the shipments index showed improvement: The index remained positive and edged slightly higher to 2.4. The percentage of firms reporting increased shipments (25 percent) was slightly greater than the percentage reporting declines (22 percent). Labor market conditions showed signs of stabilizing this month. The employment index increased from -5.2 in January to 0.9 this month, its first positive reading in eight months. The percentage of firms reporting employment increases (15 percent) narrowly exceeded the percentage reporting decreases (14 percent). Price Indexes Continue to Moderate The price indexes suggest continued moderation in price pressures this month. For the second consecutive month, the prices received index was slightly negative. The percentage of firms reporting lower prices for their own manufactured goods (9 percent) was nearly matched by the percentage reporting higher prices. With regard to purchased inputs, 13 percent of firms reported paying higher prices for inputs, compared with 20 percent last month. The prices paid index fell for the third consecutive month and, at 8.9, is now at its lowest reading in eight months. Six-Month Indicators Improve The survey’s future indicators suggest that firms expect recent declines to be temporary. The future general activity index in-creased from a reading of 29.2 to 32.1, its third consecutive monthly increase (see Chart). The percentage expecting increases in activity over the next six months (47 percent) exceeded the percentage expecting decreases (15 percent). The indexes for future new orders and shipments showed a mixed pattern this month. The future new orders index increased 6 points, while the future shipments index fell 9 points. The future employment index improved modestly, increasing from 10.7 to 14.9. Twenty-five percent of firms expect to increase employment over the next six months; 10 percent expect to decrease it. In special questions this month, firms were asked about their expectations for production growth for the first quarter (see Special Questions). Nearly 54 percent of the firms expect increases in production in the first quarter; 25 percent expect decreases. Nearly 47 percent of the firms said first quarter production growth would represent an acceleration in growth (only 9 percent characterized it as “significant acceleration”; 38 percent said the expected growth represented “some acceleration”). Summary The February Business Outlook Survey indicated weakness in the region’s manufacturing sector this month. Firms reported decreases in overall activity and slight declines in new orders. A slight rise in shipments was one positive sign, along with an apparent stabilization of labor market conditions. Firms reported a continued trend of moderation in price pressures. Responses suggest that firms expect declines to be short-lived, since first quarter production is expected to rise and orders and shipments are expected to increase over the next six months. Special Questions (February 2013) 1. What change, if any, do you anticipate in your firm's production during the first quarter of 2013 compared to the fourth quarter of last year? Expected First Quarter Production Growth Increase of more than 5% 16.9% Increase of 3-5% 14.1% Increase of less than 3% 22.6% Total increase 53.6% No change 21.1% Decrease of less than 3% 8.1% Decrease of 3-5% 5.6% Decrease of more than 5% 11.3% Total decrease 25.1% Average growth expected for all firms: 0.9% Average growth for firms attributed to seasonal factors*: 1.6% Average growth attributed to change in conditions*: 0.4% 2. Would this represent an acceleration or deceleration of growth from the fourth quarter? Significant acceleration 8.5% Acceleration: Some acceleration 38.0% 46.5% No change 18.3% Some deceleration 32.4% Deceleration: Significant deceleration 0.0% 32.4% 3. Does the expected change reflect seasonal factors or a change in business conditions? Seasonal factors 33.8% Change in business conditions 32.4% Other 16.9% *Calculation based on responses to question 3. Percentages may not add to 100 percent because not all firms answered all questions Summary of Returns February 2013 February vs January Six Months from now vs. February Prev. Prev. Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff. Index Index Index Index General Busines -5.8 19.3 48.6 31.8 -12.5 29.2 46.7 26.0 14.6 32.1 Conditions New Orders -4.3 21.8 48.5 29.6 -7.8 32.5 50.7 27.0 12.7 38.0 Shipments 0.4 24.8 52.9 22.4 2.4 38.9 48.3 24.8 18.0 30.3 Unfilled Orders -1.0 11.1 63.2 22.2 -11.2 2.9 18.8 53.4 14.4 4.3 Delivery Times -2.0 13.0 71.0 12.8 0.2 -8.5 15.1 55.6 15.5 -0.4 Inventories -6.5 12.9 62.0 22.8 -10.0 -2.3 21.2 45.6 23.8 -2.6 Prices Paid 14.7 13.2 82.6 4.3 8.9 34.3 27.5 57.8 1.1 26.4 Prices Received -1.1 8.6 79.8 9.2 -0.5 21.7 32.8 50.2 7.5 25.4 Number of Emp. -5.2 15.0 68.0 14.1 0.9 10.7 24.6 56.3 9.7 14.9 Avg. Emp. Wrkwk -8.3 15.0 66.4 16.5 -1.6 8.9 18.1 62.1 11.7 6.5 Capital Ex. -- -- -- -- -- 6.0 30.6 40.2 15.0 15.7 Notes: (1) Items may not add to 100 percent because of omission by respondents. (2) All data are seasonally adjusted. (3) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. (4) Survey data reflect information received through February 19, 2013. January 2013 Manufacturing activity declined moderately this month, according to firms responding to the January Business Outlook Survey. Following reported increases in business activity in late 2012, most indicators fell back from their readings posted last month. The survey's broad indicators of future activity, however, showed some improvement this month. Indicators Suggest Slight Declines The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from a revised reading of 4.6 in December to -5.8 this month (see Chart).* The demand for manufactured goods showed slight declines this month: The new orders index declined from a revised reading of 4.9 in December to -4.3 in January. The shipments index remained slightly positive but suggests no overall growth—the percentage of firm with increased shipments was mostly offset by the percentage reporting decreased shipments (26 percent). The indexes for both delivery times and unfilled orders recorded slightly negative readings this month. Labor market conditions at reporting firms deteriorated this month. The employment index, at -5.2, fell from -0.2 in December. The percentage of firms reporting decreases in employment (16 percent) exceeded the percentage reporting increases (11 percent). Firms also indicated a decrease in the average workweek compared to last month. Price Indexes Moderate The indexes for prices received for respondents’ own manufactured goods and prices paid for purchased inputs suggest re-duced price pressures this month. The prices received index decreased 14 points, from 12.4 to -1.1. The percentage of firms reporting lower prices for their own manufactured goods (9 percent) was slightly greater than those reporting higher prices (8 percent). The prices paid index fell 9 points; 20 percent of firms reported higher costs, compared to 27 percent last month. Six-Month Indicators Improve The survey’s future indicators suggest that firms expect recent declines to be temporary. The future general activity index in-creased from a revised reading of 23.7 to 29.2, its second consecutive monthly increase (see Chart). The percent expecting increases in activity over the next six months (43 percent) exceed the percentage expecting decreases (14 percent). The future new orders and shipments indexes also improved, increasing 4 points and 11 points respectively. The future employment index, however, fell modestly from 11.2 to 10.7. Only 22 percent of firms expect employment to increases over the next six months. In this month’s special questions, firms were asked about the factors that are influencing their hiring plans over the next 12 months (see Special Questions). The most frequently cited factors among firms restraining hiring were the need to keep operating costs low and low expectations for sales growth. Uncertainty about healthcare insurance and regulations were also highly ranked factors. Thirty-seven percent of the firms indicated that federal fiscal policy developments have decreased hiring plans. Summary The January Business Outlook Survey suggests that activity in the region’s manufacturing sector decreased moderately this month. Firms reported decreases in overall activity, new orders, and employment this month. Firms also reported a moderation of prices pressures compared to the previous month. The survey’s future activity indexes suggest that firms expect growth over the first six months of 2013. * The survey’s annual historical revisions, which incorporate new seasonal adjustment factors, were released on January 10, 2013. The full set of revised historical data is available at: http://www.philadelphiafed.org/research-and-data/regional-economy/business- outlook-survey/historical-data/revisions/historical-revisions-2013.cfm. SPECIAL QUESTIONS (January 2013) 1. What are the three most important factors, if any, restraining your hiring plans? Factor Most Second Most Third Most Total Important Important Important Firm wants to keep operating costs low 16.4% 19.2% 9.6% 45.2% Expected growth of sales is low 27.4% 9.6% 5.5% 42.5% There is uncertainty about the cost of health insurance 5.5% 12.3% 15.1% 32.9% There is uncertainty about other regulations or government policies 9.6% 6.8% 11.0% 27.4% Firm cannot find workers with required skills 8.2% 5.5% 11.0% 24.7% Labor costs are high 5.5% 8.2% 6.8% 20.5% There are no sources of restraint 12.3% 4.1% 1.4% 17.8% Current staff is underutilized/working reduced hours 1.4% 6.8% 5.5% 13.7% Firm's financial position has deteriorated 2.7% 5.5% 2.7% 11.0% Other 2.7% 1.4% 1.4% 5.5% 2. What effects have federal fiscal policy developments had on your hiring plans? Increased hiring plans 4.1% Decreased hiring plans 37.0% No change in hiring plans 49.3% NR 9.6% Total 100.0% Summary of Returns January 2013 January vs. December Six Months from now vs. January Prev. Prev. Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff. Index Index Index Index General Busines 4.6 24.4 45.4 30.2 -5.8 23.7 42.9 38.1 13.8 29.2 Conditions New Orders 4.9 26.8 42.2 31.1 -4.3 28.3 45.1 36.1 12.5 32.5 Shipments 14.7 26.0 41.2 25.6 0.4 28.0 49.1 35.4 10.2 38.9 Unfilled Orders -2.0 12.2 70.4 13.2 -1.0 2.7 13.3 64.7 10.4 2.9 Delivery Times -6.0 8.5 73.4 10.5 -2.0 2.5 6.0 71.3 14.4 -8.5 Inventories -7.8 9.1 74.4 15.6 -6.5 -2.5 18.9 50.8 21.2 -2.3 Prices Paid 23.5 20.1 71.0 5.4 14.7 45.8 38.0 51.2 3.7 34.3 Prices Received 12.4 7.9 83.0 9.0 -1.1 25.6 28.9 57.8 7.2 21.7 Number of Emp. -0.2 10.6 70.5 15.8 -5.2 11.2 22.2 59.8 11.6 10.7 Avg. Emp. Wrkwk 0.4 9.1 72.5 17.4 -8.3 14.4 19.9 63.2 11.0 8.9 Capital Ex. -- -- -- -- -- 10.4 23.3 50.7 17.3 6.0 Notes: (1) Items may not add to 100 percent because of omission by respondents. (2) All data are seasonally adjusted. (3) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. (4) Survey data reflect information received through January 15, 2013.