Federal Reserve Bank (Fed) of Philadelphia Capex Index

Philadelphia Fed Capex Outlook reflects an estimated change in capital investments in the Philadelphia Federal Reserve zone for the next six months. This region includes Pennsylvania, New Jersey and Delaware.

The forecast value is calculated based on a survey of leading industrial enterprises in the region. In addition to a general assessment of capital expenditures in the industry, business leaders are polled to assume whether the situation in their companies will improve, worsen or remain unchanged. In particular, respondents assess new orders, shipment, unfilled orders, suppliers' delivery times, inventories, prices paid, prices received, number of employees, average hours worked per week.

The region falling under the responsibility of the Philadelphia Federal Reserve Bank is one of the most economically active regions of the country, that is why its manufacturing capex outlook is often monitored by analysts. The manufacturing sector usually demonstrates a more vivid cyclic nature and reflects current changes earlier than the economy in general. Therefore, expectations of participants of this market serve as a leading indicator of the US economy health.

The index is calculated as a difference between the percentage of positive forecasts and the percentage of negative ones. If the final index value is positive, it means that manufacturers in the region plan to invest capital in production. Readings below zero indicate worsening of business sentiment in the manufacturing segment of the economy.

However, the Philadelphia Fed Capex Outlook rarely causes dollar volatility.