Manufacturing conditions in the Philadelphia region significantly worsened in January due to brutal winter weather, according to the Philadelphia Federal Reserve's survey of business owners.
The Philadelphia Fed's manufacturing index dropped sharply to a reading of negative 6.3 in February from a 9.4 reading in January.
Economists were expecting a positive reading of 8.
The Philadelphia Fed Index questions manufacturers on general business conditions. Values greater than zero indicate economic growth, while values less than zero indicate contraction.
The index had been positive for eight consecutive months, but a series of winter storms intermittently interrupted businesses along the East Coast, the Philly Fed noted.
Current shipments and new orders indexes also weakened in January. The demand for manufactured goods, as measured by the current new orders index, decreased from a reading of 5.1 to -5.2 this month.
On a brighter note, employment among the firms continued to increase, and companies remain optimistic about the growth of overall manufacturing activity for the next six months.
The future general activity index increased 6 points in January, from a relatively high reading of 34.4 in January, to 40.2.
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