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Richmond Fed's Current Activity up 3 to 3
Manufacturing activity in the central Atlantic region firmed somewhat after stabilizing in November, according to the Richmond Fed's latest survey. The index of overall activity edged higher as positive readings for shipments and new orders offset a slight decline in the reading for employment. Modest improvement was also evident in most other indicators. District contacts reported that backlogs turned positive and noted that capacity utilization steadied. Delivery times were virtually unchanged, while finished goods inventories grew at a slightly faster rate.
Looking ahead, assessments of business prospects for the next six months were less optimistic in December. Contacts at more firms anticipated that shipments, new orders, backlogs, capacity utilization and capital expenditures would grow more slowly during the next six months.
Survey assessments of current prices revealed that both raw materials and finished goods prices grew at a slower rate in December than a month ago. Over the next six months, respondents expected growth in raw materials prices to rise at about the same pace as they had anticipated last month, while they expected price growth in finished goods to grow at a quicker rate.
In December, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — increased three points to 3 from November's reading of 0. Among the index's components, shipments gained two points to 3, and new orders picked up nine points to finish at 7, while the jobs index inched down four points to −4.
Most other indicators also suggested modest improvement. The index for backlogs of orders turned positive, picking up eleven points to finish at 1, and the capacity utilization indicator advanced six points to 0. Additionally, the delivery times index was almost unchanged at 4, while our gauges for inventories were mixed in December. The finished goods inventories index added five points to 23, while the raw materials inventory index lost two points to end at 13.
Posted: December 27, 2011 Tuesday 10:00 AM