Manufacturing in U.S. Mid‑Atlantic Region Slumps Sharply Amid Rising Costs

Summary:
Manufacturing activity in the U.S. mid‑Atlantic region plunged in October, with the business activity index dropping to –12.8. Despite a rise in new orders, companies reported sharply reduced shipments and increased input costs. Nearly half of firms noted hikes in the prices they paid, and more than one‑quarter raised prices for goods sold.

Detailed Report:
The Philadelphia Federal Reserve Bank’s latest survey reveals a concerning contraction in manufacturing for October in the U.S. mid‑Atlantic area (covering eastern Pennsylvania, southern New Jersey and Delaware). The business activity index slid to –12.8, down from 23.2 in September, far below economists’ forecast of 8.5. While new orders rose to 18.2 (from 12.4), shipments were hit hard, dropping to 6.0 from 26.1.

On the cost front, manufacturers reported that input‑price pressures are building. The index for “prices paid” rose to 49.2, indicating nearly 49 % of firms faced rising input costs and none reported decreases. The “prices received” index climbed to 26.8, with nearly 28 % of firms raising the prices of goods they sell. Analysts interpret these signals as early signs of inflation creeping in through the industrial sector, even as overall economic output weakens.

The divergence—rising orders but falling shipments—suggests companies are facing bottlenecks or delays, possibly tied to supply‑chain disruption or resource constraints. With elevated costs and shrinking output, the region’s manufacturing outlook appears strained. Economists caution that if these trends spread, they could feed into broader inflation and slow national growth.