Research >> Economics
Richmond Fed's Current Activity Index slipped 8 points to a reading of 14
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Fifth District manufacturing activity continued to expand in April, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders remained solid. New hiring increased modestly, while the average workweek lengthened and average wage increases moderated. Prices of raw materials and finished goods rose at a faster pace compared to last month.
Manufacturers remained optimistic about future business conditions, although expectations were less buoyant compared to the past two months. Producers continued to look for solid growth in shipments and in new orders. Backlogs of new orders were expected to build more gradually in the next six months and capacity utilization was expected to increase at a slower rate. Survey participants expected unchanged vendor lead times.
Firms expected modest growth in hiring during the next six months, while wage increases are anticipated to be more widespread. Survey participants looked for little change in the average workweek. For the next six months, producers expected faster growth in prices paid and received.
Overall, manufacturing conditions remained firm in April, with some components softening from last month's robust readings. The composite index for manufacturing moved to a reading of 14, following last month's reading of 22. The index for shipments lost 13 points, while the new orders index shed six points, finishing at readings of 14 and 18, respectively. Manufacturing employment softened this month; the index settled at a modest reading of 8.
Backlogs rose at a faster pace this month, pushing the index up 10 points to a reading of 11. Capacity utilization improved in April. The index edged up one point to end at 18. The vendor lead time indicator remained nearly flat this month at a reading of 2. Finished goods inventories rose at a somewhat slower pace compared to a month ago. That index lost four points, ending at a reading of 14. Additionally, raw materials inventories grew at a slower pace in April. That gauge moved down to 15 from 21.
Posted: April 26, 2016 Tuesday 10:00 AM