Manufacturing in the Philadelphia region slowed more than forecast in April, as measures of orders and sales fell.
The Federal Reserve Bank of Philadelphia’s general economic index dropped to 18.5, the lowest level since November, from 43.4 the prior month which was the highest level since 1984. Readings greater than zero signal expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware.
Rising energy prices and supply-chain disruptions at auto producers like Ford Motor Co. following last month’s earthquake and tsunami in Japan may slow manufacturing in coming months. Nonetheless, growing exports to emerging economies like China and inventory rebuilding will continue to drive the factory expansion that is leading the recovery.
“In the first quarter, production growth was pretty strong and demand growth was not all that strong, so we would expect production growth to slow relative to demand,” Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, said before the report. “Japan is an issue and it will particularly affect auto production.”
Economists surveyed by Bloomberg forecast the index would fall to 36.9, according to the median estimate of 56 economists surveyed by Bloomberg News. Estimates ranged from 28 to 43.8.
Other reports today showed consumer confidence rose last week for a fourth consecutive time, more Americans than projected filed claims for jobless benefits and the index of leading economic indicators climbed last month.
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