Econoday Report: Philadelphia Fed Survey 15, 2007

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Philadelphia Fed Survey

Definition
The general conditions index from this business outlook survey is a diffusion index of manufacturing conditions within the Philadelphia Federal Reserve district. This survey, widely followed as an indicator of manufacturing sector trends, is correlated with the ISM manufacturing index and the index of industrial production. Why Investors Care

Released on 3/15/07 For Mar 2007

General Business Conditions Index - Level
Actual	0.2
Consensus	5.0
Consensus Range	-5.0 to 10.0
Previous	0.6

Highlights
The Philadelphia Fed's regional manufacturing index is a giving a strong signal of no growth, at 0.2 in March vs. 0.6 in February. The new orders index is confirming stagnant conditions, at 1.9 vs. February's -0.5. The levels show no month-to-month change in activity, consistent with the ISM manufacturing index that has hovered near 50 -- its neutral level -- the last several months.

Inventories contracted in the month, at -3.7, to confirm readings in the ISM and Empire State reports that supply managers are scrambling to adjust to slowing conditions. Delivery times quickened sharply, at -13.2 and in strong confirmation of slowing activity. But price readings, because of higher oil costs, continue to show pressure.

Initial reaction to the data in the markets was mild, but the report clearly confirms that the manufacturing sector, after a long expansion, is now flat in the water. Expectations will be firm for another flat ISM manufacturing report on April 2.

Market Consensus Before Announcement
The general business conditions component of the Philadelphia Fed's business outlook survey index fell to 0.6 in February from 8.3 in January. The new orders index actually turned negative with a reading of -0.5 from January's 1.3. The Philadelphia Fed manufacturing survey has been one of the weaker regional surveys in recent months.

Philadelphia Fed survey Consensus Forecast for March 07: +5.0
Range: -5.0 to +10.0

Trends

The Philadelphia Fed's business outlook survey is a good leading indicator for the index of industrial production. It is reported in the third week of the month and thus has a lead time of nearly three weeks.

Data Source: Haver Analytics

2007 Release Schedule

Released On: 1/18 2/15 3/15 4/19 5/17 6/21 7/19 8/16 9/20 10/18 11/15 12/20

Released For: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec