Research >> Economics
Richmond Fed's Current Activity Index softened slightly to a reading of 3
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Fifth District manufacturing activity grew mildly in June, according to the most recent survey by the Federal Reserve Bank of Richmond. The volume of new orders rose slightly, while shipments softened. Manufacturing employment weakened compared to last month, while average wage growth eased and the average workweek lengthened.
Manufacturers looked for better business conditions in the next six months. Producers anticipated a higher volume of new orders and shipments. Additionally, firms anticipated greater backlogs of new orders and predicted capacity utilization would increase. Expectations were for longer vendor lead times in the six months ahead.
Survey participants also planned more hiring, along with strong growth in wages and a pickup in the average workweek in the next six months.
Prices of raw materials and finished goods rose at a slower pace in June compared to last month. However, firms expected faster growth in prices paid and prices received over the next six months than they anticipated a month ago.
Overall, manufacturing conditions softened slightly. The composite index for manufacturing moved to a reading of 3 following last month's reading of 7. The index for shipments fell eight points, ending at 2, while the index for new orders gained one point, finishing at a reading of 4. Manufacturing hiring slowed this month. At an index of 3, the June indicator dropped seven points from last month's reading of 10.
Vendor lead time flattened, moving the index to 1, and the indicator for the backlog of orders decreased to -3 from 1. The capacity utilization gauge climbed ten points this month, ending at 8. Finished goods inventories grew at a slower pace. The index fell ten points, ending at 4. Raw materials inventories built up more quickly. That gauge moved to 14 from 9.
Posted: June 24, 2014 Tuesday 10:00 AM