New orders are improving at a record rate according to the unadjusted data of the Philly Fed March 2011 Business Outlook Survey.
Going back through the data to 1968 when this survey began recording new orders, this was the highest percentage of respondents who said new orders are improving. Overall, the survey is near past highs also.
Results from the Business Outlook Survey suggest that regional manufacturing activity continued to show improvement in March. The survey’s broadest indicators either improved from their readings in February or remained at relatively high levels. Increases in input prices continue to be widespread, and more firms have been reporting increases in prices for their manufactured goods in recent months. The survey’s broad indicators of future activity also showed notable improvement this month. Most firms also indicated that they expect acceleration in production over the next quarter.
The future general activity index increased 16 points, to a reading of 63.0, its highest reading since February 1993. The indexes for future new orders and shipments also improved, increasing 18 and 8 points, respectively. Continuing to reflect optimism about employment expansion in the manufacturing sector, the future employment index increased 6 points. More firms expect to increase employment over the next six months (33 percent) than expect to decrease employment (2 percent).
Econintersect warns as always this is an opinion survey – and is not hard data. The strength in new orders seems overly high as there is little indication in other indicators and anecdotal information of this much of a surge. Much of the data continues to show continuing improvement, just not as strong as this survey indicates.
The continuing improvement in unfilled orders has been confirmed by hard data to date, and is indicative of an improving economy.