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Richmond Fed's Current Activity down 9 to -10
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Manufacturing activity in the central Atlantic region pulled back in August after stalling in July, according to the Richmond Fed's latest survey. The index of overall activity was pushed lower as growth in new orders and shipments declined further into negative territory. Employment remained in positive territory but grew at a pace below July's rate. Other indicators also suggested weakening activity. District contacts indicated that backlogs and capacity utilization continued to contract, while delivery times turned negative. Moreover, manufacturers reported that inventory building remained on pace with July.
Looking ahead, manufacturers' optimism regarding future business prospects dropped considerably in August. An increasing number of firms anticipated slower growth across the board for all future activity indicators.
Survey assessments of current prices revealed that both raw materials and finished goods prices grew at a somewhat quicker rate in August than a month ago. In addition, respondents indicated that during the next six months they expected growth in both raw materials and finished goods prices to advance more quickly from what they had anticipated last month.
In August, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — declined nine points to −10 from July's reading of −1. Among the index's components, shipments lost sixteen points to −17, and new orders dropped six points to finish at −11, while the jobs index inched down three points to 1.
Other indicators also suggested additional softening. The index for capacity utilization declined eight points to −14 and the backlogs of orders fell seven points to end at −25. Additionally, the delivery times index moved down twelve points to end at −4, while our gauges for inventories were virtually unchanged in August. The finished goods inventory index held steady at 17 in August, while the raw materials inventories index added one point to finish at 19.
Posted: August 23, 2011 Tuesday 10:00 AM