Research >> Economics
Richmond Fed's Current Activity fell 16 to -6
|
Manufacturing activity in the central Atlantic region paused in May, after expanding during the previous seven months, according to the Richmond Fed's latest survey. The index of overall activity was pushed into negative territory by weak readings for shipments and new orders, while employment growth held steady. Other indicators suggested additional softness. District contacts reported that capacity utilization turned negative and backlogs fell further, while delivery times grew more slowly. In addition, manufacturers reported an uptick in finished goods inventory growth.
Despite the recent decline in activity, manufacturers were generally optimistic about their future prospects in May. Survey contacts at an increasing number of firms looked for solid growth in shipments, new orders, capacity utilization and capital expenditures over the next six months.
Survey measures of current prices revealed that prices of raw materials grew at a rapid pace, and finished goods grew at a slightly quickening pace in May. Respondents indicated that during the next six months they expected growth in both raw materials and finished goods prices to slow somewhat from what they had anticipated last month
Current Activity
In May, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — fell sixteen points to −6 from April's reading of 10. Among the index's components, shipments decreased nineteen points to −13, new orders dropped twenty-five points to finish at −15, while the jobs index held steady at 14.
Other indicators were mostly weak. The index for capacity utilization moved down fourteen points to −12, and the backlog of orders index lost eighteen points to −19. The delivery times index declined thirteen points to end at 5, while our gauges for inventories were mixed in May. The finished goods inventory index edged up two points in May to end at 12, while the raw materials inventories index eased two points to 16.
Posted: May 24, 2011 Tuesday 10:00 AM