Some Fifth District manufacturing firms reported modest improvements in December, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index climbed into positive territory, increasing from −9 in November to 1 in December. Each of its three component indexes — shipments, new orders and employment — improved, with the index for shipments seeing the most notable increase from −8 in November to 5 in December.

Alongside a slightly positive employment index, the wage index increased notably from 25 to 37 in December, surpassing its October reading of 34. The local business conditions index remained unchanged at −6 in December. However, a larger portion of firms are pessimistic about local business conditions over the next six months, as the expectations index fell to −20 in December.

The indexes for order backlogs and vendor lead time remained firmly in negative territory, indicating that, on balance, businesses continued to see shrinking backlogs and lead times.

The average growth rates of both prices paid and prices received decreased in December. Expectations for both over the next 12 months also decreased and are much lower than current price trends.