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The Philadelphia Federal Index (also known as the Philadelphia Fed Index, or the Business Outlook Survey) is a report published monthly by the Federal Reserve Bank of Philadelphia, dealing with the level of expansion or contraction within the manufacturing industry. The survey is released three weeks into the month and includes data from the previous month (for example, June 18th’s report would include data about May.)

The report is based on a survey of questions administered to employees and owners in participating manufacturing sector industries across Philadelphia, New Jersey and Delaware. Participants are asked about the overall change in their business activities for that month. Based on the survey, the report generates a number, either negative or positive. A number below zero indicates that manufacturing-sector business is contracting, while a number above zero indicates that business is expanding. The report also features comparisons between the current month and the previous month, as well as a six-month overview of past reports.

The importance of the report comes from the importance of manufacturing in general: expansion or contraction of manufacturing can be a leading indicator for the behavior of a country’s economy as a whole. Although this is a regional report, traders consider it to be a good prediction of the information on the Purchasing Managers’ Index, which reflects similar data for the entire US.