Research >> Economics
Richmond Fed's Current Activity Index dropped 8 points to a reading of -8
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Manufacturing activity declined in March, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders dropped. Order backlogs fell and capacity utilization declined. Hiring in the manufacturing sector was soft and the average workweek shortened. Wage growth remained modest.
Looking ahead six months, producers anticipated more favorable business conditions. Producers expected strength in shipments and new orders, and a jump in capacity utilization. Expectations were for a growing backlog of orders and a slight rise in vendor lead-times. Further, producers anticipated robust growth in hiring and wages, along with a modestly longer workweek.
Prices of raw materials and finished goods rose only slightly in March. Manufacturers anticipated mildly faster price growth over the next six months, compared with the current pace.
Manufacturing activity decelerated this month after flattening in February. The composite index fell to −8 in March from a reading of 0 a month earlier. The shipments index collapsed to −13, as did the index for the volume of new orders, compared to month-ago readings of −1 and −2, respectively. Capacity utilization also fell, with that index shrinking three points to −7.
The gauge for vendor lead-times dropped to −9 from 2. Finally, backlogs of new orders lost two points, settling at −12 in March.
As shipments declined, finished goods inventories rose, pulling the index to 25 from 20. Raw materials inventories also grew, with that indicator gaining nine points to end the survey period at 25.
Posted: March 24, 2015 Tuesday 10:00 AM