Economy

Richmond Manufacturing Index Remains in Contraction at -4

October 24, 2016

Manufacturing activity in the Fifth District slowed in October according to the Survey of Manufacturing Activity produced by Federal Reserve Bank of Richmond. The composite Index registered -4, improving from -8 in September and -11 in August.

New orders and backlogs decreased in October but remained in negative numbers. The shipment index climbed from contraction but shipments were relatively flat for the month. The capacity utilization index was negative but decreased at a slower rate compared to September.

Employment levels and wages increased slightly across firms. Pricing for raw materials and finished goods rose faster this month.

Producers are expecting moderate growth in shipments and new orders for the next six months. The outlook index gained five points, registering at 18. Longer lead times and growing backlogs are anticipated. Utilization rates are expected to increase along with higher employment levels. Respondents expect input prices to grow at a 1.5 percent rate and finished goods an annualized 0.71 percent rate.