Fifth District manufacturing activity strengthened in January, with continued growth in new shipments and the volume of new orders. Employment picked up, although increases in average manufacturing wages were less widespread than in December. The average workweek continued to grow, but increases were less prevalent in January than a month earlier. Growth in input prices moderated, while growth in prices of finished goods accelerated.

Expectations for shipments in the next six months were upbeat, and survey participants' outlook for the volume of new orders continued to be optimistic. Manufacturers anticipated longer lead times and increasingly planned for more hiring and higher wages. Despite a decline in the current month's average workweek index, producers continued to expect a longer workweek during the six months ahead.

Survey respondents looked for prices of inputs to rise more rapidly over the first half of 2017, while they anticipated slower increases in prices received for their goods.

Manufacturing activity expanded in January, with the composite index adding four points to last month's gauge to end the survey period at a reading of 12. The index for shipments gained a point, finishing at 13, and the volume of new orders index rose to 15 from 11. Increased vendor lead times were less likely to rise this month, with the indicator moderating by five points to a reading of 5.

Growth in the current backlog of new orders moderated this month, moving to 4 from December's reading of 8. In addition, the capacity utilization measure shed two points, to settle at 8. Inventory growth slowed from a month ago. The index for finished goods settled three points lower this month, at a reading of 8, and the indicator for raw materials inventories softened 10 points to end at 15.