Manufacturing activity in the Philadelphia area soared in February, climbing to its highest level since January 2004.
The Federal Reserve Bank of Philadelphia said that its manufacturing index jumped to 35.9 in February, from reading of 19.3 in January.
Analysts expected the index to edge up only to 21.0 in February.
In the report, all the broad indicators showed improvement, with new orders continuing to rise.
Companies also reported a pickup in hiring with a higher percentage of firms expanding payrolls. Increases in input prices continue to be reported, and more firms have been reporting higher prices for their own manufactured goods.
“The jump in the Philly Fed manufacturing index… provides further evidence that the modest increase in manufacturing output in January was probably due to the effects of the unusually heavy snow fall,” said Paul Dales, senior U.S. economist at Capital Economics. “The detail is arguably even stronger. Both the new orders and shipments indices increased to seven-year highs, while the employment index rose to its highest level since 1973. Taken together with the Empire State survey, which was released earlier this week, the survey is consistent with the ISM manufacturing index continuing to ride high at around 60 in February.
Overall, Dales added, the manufacturing recovery appears to gathering pace once gain.
This is just as well given that consumption growth appears to be slowing,” he noted.