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Richmond Fed's Current Activity Index down 10 to 4
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Manufacturing activity in the central Atlantic region expanded in May for the sixth consecutive month but at a more moderate pace than a month ago, according to the Richmond Fed's latest survey. Looking at the main components of activity, shipments held steady and employment grew at a faster rate, while new orders grew at a rate well below April's pace. Most other indicators also suggested a slowdown in growth. District contacts reported that backlogs turned negative and capacity utilization grew more slowly. Vendor lead-time grew at a slower rate, while raw materials inventories grew at a quicker pace.
In spite of the recent moderation in activity, assessments for business activity over the next six months remained generally positive since our last report. Contacts at more firms anticipated that shipments, new orders, backlogs, capacity utilization, and capital expenditures would continue to grow at a solid pace.
Survey assessments of current prices revealed that both raw materials and finished goods prices grew at a somewhat slower rate in May than a month ago. Over the next six months, respondents expected growth in both raw materials and finished goods prices to rise at a somewhat slower pace than they had anticipated last month.
In May, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — fell ten points to 4 from April's reading of 14. Among the index's components, shipments declined eighteen points to 0 and new orders dropped twelve points to end at 1, while the jobs index moved up six points to 16.
Most other indicators also suggested weaker activity. The capacity utilization indicator lost thirteen points to finish at 2, while the backlogs index moved down twenty points to −18. Additionally, the delivery times index lost four points to 4, while our gauges for inventories were mixed in May. Indexes for finished goods inventories held steady at 7, while raw materials inventories added four points to finish at 21.
Posted: May 22, 2012 Tuesday 10:00 AM