Research >> Economics
Richmond Fed's Current Activity up 7 to 5
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Manufacturing activity in the central Atlantic region advanced modestly in October, following a slight pullback in September, according to the Richmond Fed's latest survey. Looking at the main components of activity, shipments and employment edged back into positive territory while the volume of new orders posted solid gains. Other indicators varied. District contacts reported that growth in order backlogs was virtually unchanged, while delivery times grew more slowly. Furthermore, manufacturers reported that capacity utilization grew at a faster pace, while inventories grew at a slightly slower rate.
Looking ahead, manufacturers' optimism remained in place in October. Survey contacts anticipated that their shipments, new orders, backlog of orders, and capital expenditures would grow more rapidly in the months ahead.
Survey measures of current prices revealed that raw materials prices grew at a slightly quicker pace in October, while finished goods prices grew on par with September. Respondents indicated that during the next six months they expected the prices of raw materials to change little from what they had anticipated last month, but expected somewhat faster growth in finished goods prices.
In October, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — turned positive, gaining seven points to 5 from September's reading of -2. Among the index's components, shipments rose seven points to 3, new orders picked up eight points to finish at 8, and the jobs index increased seven points to 4.
Other indicators were mixed. The backlogs of orders remained negative, losing one point to −12, and the index for capacity utilization moved up six points to 6. The delivery times index eased three points to end at 5, and our gauges for inventories were somewhat lower in October. The finished goods inventory index dropped nine points to 6, and the raw materials inventory index slipped three points to finish at 10.
Posted: October 26, 2010 Tuesday 10:00 AM