Federal Reserve Bank of Philadelphia

08/17/2026 | Press release | Archived content

Manufacturing Business Outlook Survey - August 2026 Report

Manufacturing activity in the region continued to expand overall, according to the firms responding to the August Manufacturing Business Outlook Survey. The survey's indicator for general activity rose to a five-year high. The new orders and shipments indexes moved lower but remained elevated. The employment index rose, continuing to suggest overall gains in employment. Both price indexes declined this month but remained elevated. Most future indicators jumped higher this month, suggesting widespread expectations for overall growth over the next six months.

Most Current Indicators Remain Elevated

The diffusion index for current general activity rose from 41.4 in July to 47.4 in August, its highest reading since April 2021 (see Chart 1). Nearly 57 percent of the firms reported increases in activity, while 10 percent reported decreases; 29 percent of the firms reported no change in activity. The current new orders and shipments indexes both declined but remained above their long-run nonrecession averages. The new orders index fell 7 points to 30.1. Almost 46 percent of the firms reported an increase in new orders, 16 percent reported a decrease, and 36 percent reported no change. The shipments index declined from 33.7 to 27.7 in August.

The employment index rose 18 points to 27.9, its highest reading since April 2022. Nearly 33 percent of the firms reported an increase in employment levels (up from 13 percent last month), 5 percent reported decreases (up from 3 percent), and 62 percent reported no change (down from 83 percent), the lowest share in two years. The average workweek index rose from 14.0 to 26.5.

Firms Report Overall Increases in Prices

Both price indexes declined this month to their lowest readings since February but remained above their long-run nonrecession averages. The prices paid index fell 13 points to 40.9 in August (see Chart 2). Nearly 41 percent of the firms reported increases in input prices (down from 54 percent last month), while none reported decreases (unchanged); 59 percent reported no change (up from 46 percent). The current prices received index declined 10 points to 17.7. More than 21 percent of the firms reported increases in the prices of their own goods, 3 percent reported decreases, and 74 percent reported no change.

Less Than Half of the Firms Expect Near-Term Changes to Industry Costs

In this month's special questions, the firms were asked about changes in core customer price sensitivity and anticipated cost changes. Nearly 38 percent of the firms reported that customers have become more price sensitive since last quarter, while 58 percent reported customers' sensitivity was about the same. Almost 44 percent of the firms indicated they anticipate changes in their industry's costs in the near term (down from 48 percent last quarter), and 80 percent of those firms expect their competitors to raise prices in response. Regarding when these price changes will occur, the firms' median expectation was for competitors to change prices in the next four months.

Most Future Indicators Jump Higher

The diffusion index for future general activity climbed 39 points to 73.6 this month, its highest reading since August 1983 (see Chart 1). Almost 75 percent of the firms expect an increase in activity over the next six months (up from 52 percent last month), far exceeding the 1 percent that expect a decrease (down from 17 percent); 22 percent expect no change (unchanged). The future new orders index increased 31 points to 66.0, and the future shipments index rose 24 points to 63.5, each reaching its highest reading in more than five years. The firms continue to expect increases in employment over the next six months, and the future employment index rose 6 points to 35.4, after declining for four consecutive months. Both future price indexes moved higher above their long-run averages, mostly offsetting last month's declines. The future prices paid index moved up 6 points to 62.9, and the future prices received index rose 18 points to 59.8. The index for future capital expenditures increased 18 points to 48.2, its highest reading in 53 years.

Summary

Responses to the May Manufacturing Business Outlook Survey suggest an overall expansion in the region's manufacturing activity. The indicators for current activity, new orders, and shipments all remained above their nonrecession averages this month, and the employment index rose to a multiyear high. Price increases were less widespread this month, but both price indexes remained elevated. The survey's broad indicators for future activity jumped higher and suggest widespread expectations for growth over the next six months.

Special Questions (August 2026)

1. Since last quarter, have your core customers become more or less price sensitive?

Percent (%)
More sensitive
37.5
About the same
58.3
Less sensitive
4.2
Don't know
0.0

2. Over the near term (roughly the next six months or so), can you clearly anticipate any changes in your industry's costs?

Percent (%)
Yes
43.5
No
56.6

2a. How do you anticipate that your competitors will respond?*

Percent (%)
Raise prices
80.0
Hold prices steady
20.0
Lower prices
0.0
Don't know
0.0
*Only firms that responded "yes" to question 2 responded to question 2a.

2b. How soon do you anticipate your competitors will change prices?**

Number of months
Median response
4.0
**Only firms that responded "raise prices" or "lower prices" to question 2a responded to question 2b.

MBOS Summary of Returns - August 2026

August vs. July
Six Months from Now
vs. August
Prev.
Diff.
Index
Inc.
No ch.
Dec.
Diff.
Index
Prev.
Diff.
Index
Inc.
No ch.
Dec.
Diff.
Index
General Business Activity
41.4
56.9
28.8
9.6
47.4
34.4
74.5
22.2
0.9
73.6
New Orders
37.0
45.8
35.9
15.7
30.1
35.1
66.7
27.0
0.7
66.0
Shipments
33.7
41.2
45.3
13.5
27.7
39.3
63.5
31.0
0.0
63.5
Unfilled Orders
18.1
30.0
54.5
15.5
14.4
20.9
29.1
43.1
20.6
8.5
Delivery Times
9.6
16.3
71.2
12.5
3.7
9.3
23.6
41.5
23.6
0.0
Inventories
0.3
10.2
68.0
13.9
-3.7
12.5
24.1
52.8
6.7
17.4
Prices Paid
53.9
40.9
59.1
0.0
40.9
56.7
63.7
27.7
0.8
62.9
Prices Received
27.4
21.1
74.3
3.4
17.7
41.4
60.6
27.2
0.9
59.8
Number of Employees
10.0
32.8
61.7
4.9
27.9
29.5
35.4
57.0
0.0
35.4
Average Employee Workweek
14.0
31.4
63.0
4.9
26.5
12.0
24.6
64.2
3.1
21.4
Capital Expenditures
--
--
--
--
--
30.1
48.2
45.2
0.0
48.2
Notes:
(1) Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease.
(2) All data are seasonally adjusted.
(3) Percentages may not sum to 100 because of rounding, omission by respondents, or both.
(4) Survey results reflect data received through August 17, 2026.

Federal Reserve Bank of Philadelphia
 Manufacturing Business Outlook Survey
Released: August 20, 2026, at 8:30 a.m. ET.
Federal Reserve Bank of Philadelphia published this content on August 17, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on August 20, 2026 at 13:11 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]