Philadelphia, PA, Dec. 18--The Philadelphia Federal Reserve reported factory orders in its region hit a 23-year high in December as the employment situation improved.
The Philadelphia Fed reported Thursday its business index, which measures manufacturing activity in eastern Pennsylvania, southern New Jersey and Delaware, soared to 32.1 in December from 25.9 in November. Economists had expected a reading of 25.
"The evidence continues to build that the economy is being driven by a strong cyclical upswing in the manufacturing sector," wrote John Ryding, chief market economist at Bear Stearns, in a note to clients after the Philadelphia report was released.
The new-orders index shot up 21 points to 41.8, its highest level in 23 years, signaling further strength ahead. And the employment gauge, long a sticking point for the sector, jumped to 21.9 from 3.3, suggesting firms are starting to hire. Among the executives surveyed, expectations for the next six months remained optimistic. About 57% indicated they expect productivity to grow between 2% and 3% next year, while 32% put that growth rate higher. Most suggested the increase would result from better use of technology, plant, and equipment already in place.
