Mid-Atlantic Manufacturing Activity Slows in October

Mid-Atlantic manufacturers are expanding in October close to the same pace seen last month, according to a survey released Thursday by the Federal Reserve Bank of Philadelphia.

The Philadelphia Fed's index of general business activity covering the regional factory sector fell to 20.7 in October from 22.5 in September.

The reading was slightly better than the 19.9 expected by economists surveyed by The Wall Street Journal. Readings under zero denote contraction, and above-zero readings denote expansion.

Reports on U.S. manufacturing released this week have been mixed.

Earlier Thursday, the Federal Reserve said industrial production in September increased 1.0%, while manufacturing output alone was up 0.5% on increased production in aerospace, computers, apparel and plastics.

On Wednesday, however, the New York Fed said manufacturing conditions in its state this month slowed sharply, with the top-line index falling 21 points to 6.17. New orders booked by New York manufacturers are contracting this month, a worrisome sign for future production.

The varying reports on the nation's factory sector add to questions about how demand for manufactured goods is holding up amid signs of a global slowdown.

Within the Philadelphia Fed survey, the subindexes generally show continued expansion.

The new orders index increased to 17.3 from 15.5 last month. The shipments index slowed to 16.6 from 21.6.

Demand for labor in the Philly area slowed. The employees index fell to 12.1 in October after it jumped to 21.2 in September from 9.1 in August. And the workweek index dropped to a contractionary -1.3 from 4.4.

More Philadelphia area manufacturers are trying to raise their own selling prices. The prices-received index jumped to 20.8 from 8.8. The prices-paid index edged up to 27.6 from 27.0 in September.

Philadelphia manufacturers remain optimistic about the next six months.

"The survey's indicators for future manufacturing conditions fell from higher readings but continued to reflect general optimism about growth in activity and employment over the next six months," the report said.

The general business expectations index was little changed at 54.5 from 56.0. Both readings are down from August's 66.4, which was the highest reading since June 1992.

The expected employment index slowed to 28.0 from 39.6