Research & Data
Manufacturers in the Philadelphia Federal Reserve’s district are still adding workers on balance, but the pace is easing and their hiring plans for the next six months have pulled back sharply. The employment index in the bank’s October Manufacturing Business Outlook Survey, released Oct. 15, edged down 3 points to 9.1, while the index for expected future employment fell 21 points to 30.1.
The survey covers manufacturers in the Third Federal Reserve District, which the bank defines as Delaware, southern New Jersey and eastern and central Pennsylvania. Its indexes are diffusion measures: the share of firms reporting an increase minus the share reporting a decrease. A positive reading means more firms reported gains than losses; it does not count jobs. Responses were collected Oct. 5 to Oct. 12 and are seasonally adjusted.
Activity slows but stays positive
The headline index for current general activity fell for a second straight month, to 20.9 in October from 37.8 in September. About 41% of firms reported higher activity and 20% reported lower activity, up from 8% a month earlier. The new orders index dropped 25 points to 4.3, with 39% of firms reporting more orders and 34% reporting fewer, and the shipments index fell 12 points to 15.3. Unfilled orders slid to 2.4 from 20.4.
The labor readings
On employment, 18% of firms reported increases, 9% reported decreases and 68% reported no change, producing the 9.1 index reading, down from 11.8 in September. The Philadelphia Fed said the index “continued to indicate an increase in employment overall.”
Hours cooled more noticeably. The average workweek index fell 11 points to 7.5, its lowest reading since June. Because employers often adjust hours before headcount, a smaller share of firms lengthening workweeks is worth watching alongside the employment index itself.
Looking ahead, firms still expect to add workers over the next six months, but fewer of them say so. The future employment index fell to 30.1 from 50.6, which the bank said more than offset its increase the previous month. The future general activity index fell 20 points to 33.0, its lowest since January, and the future new orders and shipments indexes each fell by roughly 25 points.
Prices remain a pressure point
Price pressures stayed high. The prices paid index eased 5 points to 43.2, with no firm reporting lower input prices, while the prices received index rose 9 points to 40.1, its highest since May 2025. Both future price indexes declined but, according to the report, remained well above their long-run averages.
In a special question, more than 52% of firms said they expect total capital spending in 2027 to be higher than in 2026, and none expected it to be lower. Plans to spend more were most common for noncomputer equipment, software and computer hardware, though at least half of firms expect spending to stay the same in every category.
Why it matters for job seekers
For people looking for factory or production work in Pennsylvania, New Jersey and Delaware, the October survey points to steady but modest hiring rather than a pullback: twice as many firms added workers as cut them. The weaker readings for hours and for hiring plans suggest employers are becoming more cautious, which could mean fewer openings or slower overtime growth in the months ahead if orders stay soft.
The catch
This is a survey of regional manufacturers, not a payroll count, and it describes only the Third District, not U.S. manufacturing as a whole. Monthly swings in diffusion indexes can be large. The official measure of factory jobs remains the Bureau of Labor Statistics payroll survey. The New York Fed’s Empire State survey, also released Oct. 15, showed a similar pattern for New York State: steady employment growth and a drop in the workweek index.
Sources
- Federal Reserve Bank of Philadelphia, “Manufacturing Business Outlook Survey (MBOS) – October 2026 Report,” October 15, 2026. https://www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/mbos-2026-10
- Federal Reserve Bank of Philadelphia, “Manufacturing Business Outlook Survey, October 2026” (text version), October 15, 2026. https://www.philadelphiafed.org/-/media/FRBP/Assets/Surveys-And-Data/MBOS/2026/bos1026t.txt
- Federal Reserve Bank of Philadelphia, “Manufacturing Business Outlook Survey,” survey overview page, accessed October 15, 2026. https://www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/manufacturing-business-outlook-survey
Featured photo: The Federal Reserve Bank of Philadelphia headquarters at 10 N. Independence Mall West in Philadelphia, photographed in April 2013. Photo: Beyond My Ken, via Wikimedia Commons (CC BY-SA 4.0). Cropped from the original.
