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Richmond Fed's Current Activity rose 7 to 25
Manufacturing activity in the central Atlantic region expanded for the fifth straight month, according to the Richmond Fed's latest survey. All broad indicators — shipments, new orders and employment — posted solid gains. Other indicators also suggested stronger activity. District contacts reported that backlogs grew at a quicker pace and that growth in capacity utilization was virtually unchanged. Manufacturers reported that delivery times and finished goods inventories grew at a somewhat higher rate.
Looking ahead, manufacturers in February were more optimistic about their future prospects. Respondents at an increasing number of firms looked for rapid growth in shipments, new orders, backlog of orders, capacity utilization, employment, and the average workweek in the next six months.
Survey measures of current prices revealed that both prices of raw materials and finished goods grew at a brisk pace in February. Moreover, respondents indicated that during the next six months they expected growth in raw materials prices to quicken, and finished goods prices to change little from what they had anticipated last month.
In February, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — rose seven points to 25 from January's reading of 18. Among the index's components, shipments increased six points to 29, new orders advanced ten points to finish at 27, and the jobs index edged up two points to 16.
Other indicators also suggested stronger activity. The index for backlogs of orders grew more quickly, gaining seven points to 12, while capacity utilization was almost unchanged at 17. The delivery times index moved up five points to end at 20, and our gauges for inventories were mixed in February. The finished goods inventory index added three points in February to end at 10, while the raw materials inventories index eased one point to 8.
Posted: February 22, 2011 Tuesday 10:00 AM