WASHINGTON (AP) — Manufacturing in the Philadelphia region contracted for the third straight month in July, a sign of further weakness in the economy. But some analysts say the report mostly reflects a regional slowdown.
The Federal Reserve Bank of Philadelphia says its index of regional manufacturing activity rose to -12.9, up from -16.6 in June. Any reading below zero indicates contraction.
Some parts of the report improved. New orders and shipments rose, though both remained in negative territory. But an index measuring employment dropped sharply from 1.8 to -8.4.
Manufacturing contracted nationwide in June for the first time in three years, the Institute for Supply Management said earlier this month. Europe’s financial crisis and slower growth in emerging markets such as China and India have dampened demand for U.S. exports.
The Philadelphia Fed’s report differs from a New York Fed survey, released Monday, that said factories were expanding in that region. And the Fed’s Beige Book, a national survey released Wednesday, said manufacturing improved in 10 of the central bank’s 12 regions.
The Philly Fed’s reading “suggests the factory sector is still in recessionary territory,” Paul Ashworth, chief U.S. economist for Capital Economics, said in a note to clients. “But the downturn doesn’t appear to be quite as bad as this … survey suggests.”
