Philly Fed: Obamacare decisions muted as manufacturing improves
The Federal Reserve Bank of Philadelphia sees an improving manufacturing climate in July and found that most companies are not planning radical changes due to the Patient Protection and Affordable Care Act, also called Obamacare.
When asked about health care plan changes, more than 72 percent of companies said they were not planning any because their health insurance satisfies the PPACA requirements, according to the fed's Business Outlook Survey.
Slightly less than 14 percent said they planned to reduce or drop health insurance coverage because of the federal mandates.
Seventy-one percent of those surveyed said they have made minimal or no changes to the workforce anticipating the health insurance mandates, but just 54 percent said that in the next year they would not make changes. More than 18 percent of firms said they would outsource more work in the next year. Eight percent said they would shift workers from full-time to part-time work.
The questions were asked before announcements that the employer mandates would be delayed until 2015, according to the fed.
Still, the survey of companies in southern New Jersey, Delaware, and eastern Pennsylvania — including the midstate — found that broad economic activity increased by more than 7 percentage points, according to the fed.
The fed was tracking manufacturing improvements in its June survey, too.
Fewer companies saw increased new orders in July, but about 60 percent expect them to increase six months from now, according to the survey.
Shipments increased by 10 percentage points over the past month, and companies are reducing their inventories as part of that, according to the survey. The inventories index dropped 15 points to -21.6, meaning companies are dipping into them to meet customer demand.
Employment indexes are looking up as well, reading 7.7, the first time it has been positive in four months, according to the fed. That means companies are hiring and retaining workers.