Richmond Fed: Manufacturing Activity Weakens

Manufacturing activity in the central Atlantic region "declined in July," according to the monthly business activity survey conducted by the Federal Reserve Bank of Richmond, as the manufacturing index slumped to negative 11 from positive 7 in June.

Index readings above zero show expansion, while numbers below zero indicate contraction.

Shipments decreased to negative 15 from positive 11, the Fed reported. Volume of new orders reversed to negative 15 from positive 9, while the backlog of orders index slumped to negative 24 from negative 1.

The capacity utilization index declined to negative 9 from positive 1, while the vendor lead time index climbed to 3 from 2. The number of employees index remained at zero, while the average workweek index was at 2 after an 11 reading last month, and the wages index fell to 8 from 11.

As for future outlook (six months from now), the shipments index was 24, up from 21 last month, while the volume of new orders index rose to 24 from 21, and backlog of orders slipped to zero from 6. Capacity utilization dipped to 13 from 18, the vendor lead time index increased to 8 from 2, the number of employees index fell to 5 from 9, while the average workweek index was at 8, from 6 the previous month, and the wages index was 21, down from 26 last month. The capital expenditures index was 11 after 9 last month.

The finished goods inventories index soared to 15 from 5, while the raw materials index grew to 11 from 10 the previous month.

The current trend in prices paid rose to 1.60 in July from 1.13 in June, while growing to 1.02 from 0.62 for prices received. The expected trend for the next six months rose to 2.06 from 2.01 for prices paid, and slid to 1.17 from 1.63 for prices received.

All firms surveyed are located within the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.

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