Economy

Manufacturing Activity Flat in Richmond Fed Region

Written by Sandy Williams


Manufacturing activity in the Fifth District was stalled in September according to the Federal Reserve Bank of Richmond.  The composite index of manufacturing activity registered 0 following last month’s reading of 14.  New orders and shipments slowed compared to August. Lead times were unchanged at an index reading of 1 for the second month.  Shipments and hiring both dropped slightly in September. 

 

Raw material prices rose in September along with finished goods prices.  Employment indices weakened with employment dropping to -6 from +6 in August along with a slight drop in average work week.  Wages strengthened to an index reading of 13, up for the second month. 

Forecasts for the next six months were optimistic with shipments and new orders expected to increase.  Lead times are expected to slow and capacity utilization to rise.  Survey-takers expect input prices to grow to an annualized rate of 2.26 percent, up from predictions of 2.15 percent in August. Finished prices rose to an annualized rate of 1.73 percent from 1.23 percent last month. Continued increases in employment and wages are expected. The future capital spending index rose to 31 from 15. 

The manufacturing Index is a gauge of broad activity in the District’s manufacturing sector. It is a composite index representing a weighted average of the shipments (33 percent), new orders (40 percent) and employment (27 percent) indexes. All firms surveyed are located within the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia

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