Federal Reserve Bank of Philadelphia (11/20/14)
According to a survey by the Federal Reserve Bank of Philadelphia, manufacturing activity in that region increased notably in November. The survey’s broadest measure of manufacturing conditions climbed from 20.7 in October to 40.8 in November. Labor market indicators also showed improvement this month. The current employment index rose 10 points in November, to 22.4. Twenty-nine percent of the firms surveyed reported increases in employment, up from 20% last month. Firms also reported more work hours, with the average workweek index rising from negative 1.3 to 7.8 this month. The future employment index rose almost 4 points to 31.5, with nearly 40% of the firms expecting to increase employment over the next six months and 56% of the firms expecting to increase employment over the next 12 months.
When firms were asked to rank the three most important factors influencing their future hiring plans, expected sales growth was the most cited factor and also deemed the most important individual factor. The need for skills not possessed by current staff and having an overworked current staff were the next highest ranked factors. When asked about factors restraining hiring plans, “to keep operating costs low” was the most cited among the top three factors, but “cannot find workers with required skills” was most frequently cited as the most important factor. Firms were also asked about how the Affordable Care Act is influencing their plans for hiring. Seventy percent of the firms indicated that no changes were made in overall staffing because of the law; 11% of the firms indicated that they had reduced full-time hiring; and 8% indicated that they have increased the use of contract workers.
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