By Ed Frankl

Manufacturing activity in the Philadelphia area declined for a fourth-straight month in December, sinking more steeply than in the previous month, indicating the region's industrial sector faces a gloomy outlook.

The Federal Reserve Bank of Philadelphia said Thursday that its index for current general activity was minus 10.5, down from minus 5.9 in November.

The reading missed forecasts for minus 4.0, according to economists polled by The Wall Street Journal, remaining in contraction territory as the measure was below zero.

The Philadelphia Fed survey polls manufacturing firms in the Third Federal Reserve District, which covers eastern Pennsylvania, southern New Jersey and Delaware. December's level marks a 17th negative reading in 19 months.

Almost 26% of firms reported falling activity, while 15% reported increases, the Philadelphia Fed said.

The indicator's measure for new orders dropped sharply and turned negative, reflecting renewed low demand for goods. The employment index also fell but suggested continued steady employment levels. By contrast, the shipments index rose, but it remains in negative territory, the survey said.

However, the survey's indicators for future activity improved, suggesting more widespread expectations for growth over the next six months, despite staying below long-run averages, the Philadelphia Fed added.

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

December 21, 2023 08:58 ET (13:58 GMT)