Research >> Economics
Richmond Fed's Current Activity down 4 to -1
|
Manufacturing activity in the central Atlantic region stalled in July after firming somewhat in June, according to the Richmond Fed's latest survey. The index of overall activity was pushed lower as growth in new orders and shipments edged into negative territory. Employment, however, continued to grow but at a pace below June's rate. Other indicators also suggested softer activity. District contacts reported that backlogs and capacity utilization fell further, but noted that delivery times and raw material goods inventories grew at a somewhat quicker pace.
Looking forward, manufacturers were generally sanguine in July, though their optimism was somewhat less rosy than last month. Survey contacts at an increasing number of firms anticipated that their shipments, new orders, and capital expenditures would grow more slowly in coming months. In contrast, they expected backlogs of orders to grow more quickly.
Survey assessments of current prices revealed that current prices of both raw materials and finished goods grew at a slower rate in July than a month ago. However, respondents indicated that during the next six months they expected prices for both raw materials and finished goods to grow more quickly than what they had anticipated last month.
In July, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — declined four points to −1 from June's reading of 3. Among the index's components, shipments was unchanged at −1, while new orders dropped five points to finish at −5, and the jobs index moved down ten points to 4.
Other indicators were also mostly weak. The index for capacity utilization lost four points to −6 and the backlogs of orders edged down seven points to end at −18. In contrast, the delivery times index picked up four points to 8, while our gauges for inventories were mixed in July. The finished goods inventory index trimmed six points in July to end at 17, while the raw materials inventories index added two points to finish at 18.
Posted: July 26, 2011 Tuesday 10:00 AM