A reading on Philadelphia-area manufacturing activity spiked to a nearly 50-year high in the month of March, the Federal Reserve Bank of Philadelphia revealed in a report on Thursday.
The Philly Fed said its diffusion index for current activity soared to 51.8 in March from 23.1 in February, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to come in unchanged.
With the substantial increase, the Philly Fed Index skyrocketed to its highest level since hitting 53.6 in April of 1973.
The surge by the headline index came as the new orders index also jumped to a nearly 50-year high, spiking to 50.9 in March from 23.4 in February.
The shipments index also climbed to 30.2 in March from 21.5 in February, while the number of employees index rose to 30.1 from 25.3.
On the inflation front, the prices paid index shot up 75.9 in March from 54.4 in February, reaching its highest level since March of 1980. The prices received index also jumped to 31.8 from 16.7.
The Philly Fed also said the survey’s future indexes indicate more optimism about continued growth over the next six months.
The diffusion index for future general activity soared to 61.6 in March from 39.5 in February, more than offsetting the drop seen in the previous month to reach its highest reading since June of 2020.
“Looking ahead, solid goods demand, rising business investment, and generous federal pandemic relief will drive a sustained regional manufacturing expansion,” said Oren Klachkin, Lead U.S. Economist at Oxford Economics.
A separate report released by the Federal Reserve Bank of New York on Monday showed an acceleration in the pace of growth in New York manufacturing activity in the month of March.
The New York Fed said its general business conditions index climbed to 17.4 in March from 12.1 in February, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to 14.5.
With the bigger than expected increase, the general business conditions index reached its highest level since hitting 21.2 in November of 2018.