Fifth District manufacturing activity improved but remained relatively flat in July, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index rose from −9 in June to 0 in July, as two of its three component indexes showed marked improvement. The indexes for shipments and volume of new orders rallied from −17 and −20 in June to 7 and −10 in July, respectively. The third component, the employment index, fell to 8 in July from 16 in June.

Like last month, the wage index remained elevated, despite a downward shift, indicating that a large share of firms continues to report increasing wages. Additionally, the local business conditions index improved in July, climbing from −32 to −13. Firms were also more optimistic about conditions in the next six months as the expectations index increased to −10 in July from −28 in June.

There was further indication of supply chain relief as the index for vendor lead time decreased again in July and the indexes for raw materials and finished goods inventories increased.

The average growth rate of prices paid and prices received decreased in July.