Research >> Economics
Richmond Fed's Current Activity Index climbed 20 points to a reading of 10
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Fifth District manufacturing activity improved in July, according to the most recent survey by the Federal Reserve Bank of Richmond.* New orders and shipments increased this month, while backlogs flattened. Employment rose modestly, while firms continue to report wage increases. Prices of raw materials and finished goods rose at a slower pace in July, compared to last month.
Manufacturers looked for better business conditions during the next six months. Firms expected moderate growth in shipments and in the volume of new orders in the six months ahead. In addition, survey participants anticipated increased capacity utilization and expected backlogs to rise. Expectations were for little change in vendor lead times during the six months ahead.
Survey participants' outlook for the months ahead included mild growth in the number of employees. Future wage increases were more prominent in the July expectations index. Firms expected faster growth in prices paid, however, anticipating somewhat slower growth in prices received.
Overall, manufacturing activity increased in July. The composite index for manufacturing climbed 20 points to a reading of 10. Additionally, the indicators for shipments and new orders increased this month. Those indexes ended at readings of 7 and 15, respectively. The orders backlog index flattened in July, the index moved up 13 points to end at 1. The manufacturing employment index rose modestly this month. That indicator gained five points to end at 6.
The capacity utilization index advanced 14 points in July, pulling the index up to a reading of 3. Vendor lead time lengthened this month, with that indicator moving up eight points to end at 10. Finished goods inventories rose across fewer firms compared to a month ago; that index moved down 11 points, ending at a reading of 15. Growth in raw materials inventories continued in July, however that indicator lost three points to end the survey period at 23.
Posted: July 26, 2016 Tuesday 10:00 AM