Research >> Economics
Richmond Fed's Current Activity Index held steady at a reading of 7
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Fifth District manufacturing activity increased at a steady pace of growth, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments rose, although new orders softened. Manufacturing employment firmed, and average wages increased sharply. The average workweek increased at about last month's pace.
Manufacturers' expectations were generally for improved business conditions. Despite a slightly weaker outlook for shipments, producers anticipated solid growth in new orders and rising backlogs. Firms expected capacity utilization to grow at a faster pace compared to last month's expectations.
Survey participants looked for only slightly slower growth in the number of employees and the average workweek during the next six months. In contrast, they expected a pick up in wages. Expectations were for slightly longer vendor lead times.
Current prices of raw materials and finished goods rose at a faster pace in May compared to last month. Manufacturers expected faster growth in prices paid and prices received over the next six months.
Overall, manufacturing conditions improved. The composite index for manufacturing held steady at a reading of 7 during the past two months. The index for shipments gained four points, ending at 10, while the index for new orders softened seven points, finishing at a reading of 3. Manufacturing employment picked up this month; the May indicator advanced six points to a reading of 10.
Vendor lead time lengthened, moving the index to 5 from a reading of 3, and the backlog of orders flattened to 1 from −9. The capacity utilization gauge slipped three points this month ending at −2.
Finished goods inventories built up at nearly the same pace as a month earlier. The index shed a point, ending at 14. Raw materials inventories grew more quickly. That gauge moved to 9 from 7.
Posted: May 27, 2014 Tuesday 10:00 AM