Research >> Economics
Richmond Fed's Current Activity Index dropped 13 points to a reading of 0
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Fifth District manufacturing activity slowed in August, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and order backlogs decreased, while new orders flattened this month. Manufacturing hiring softened this month; however, average wages continued to increase at a moderate pace. Prices of raw materials rose more slowly in August, while prices of finished goods grew slightly faster compared to last month.
Despite the soft current conditions, producers remained optimistic about future business conditions. Expectations were for solid increases in shipments and in the volume of new orders in the six months ahead, with increased capacity utilization. In addition, manufacturers looked for rising backlogs and longer vendor lead times.
Producers expected faster employment growth and solid growth in wages during the next six months. Survey participants looked for moderate growth in the average workweek. Looking ahead, manufacturers looked for faster growth in prices paid and prices received.
Overall, manufacturing conditions slowed in August, with several components softening. The composite index flattened to a reading of 0. Shipments dropped sharply; the index lost 20 points to end at −4 and the index for new orders fell 16 points to finish at a reading of 1. Manufacturing employment remained at a flat reading of 1.
Backlogs decreased in August, with the index settling 25 points lower at −15. The capacity utilization index also slipped this month, pulling the index down 14 points to a reading of −5. Vendor lead time lengthened slightly, with that indicator gaining five points to end at 9. Finished goods inventories rose at the same pace as last month; the index held steady at 24. Raw materials inventories increased at a faster pace this month. That gauge increased eight points to 24.
Posted: August 25, 2015 Tuesday 10:00 AM