Richmond Fed: Manufacturing Activity Contracts

Manufacturing activity in the central Atlantic region "declined in January following two months of modest expansion," according to the monthly business activity survey conducted by the Federal Reserve Bank of Richmond, as the manufacturing index dipped to negative 12 from positive 5 in December.

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

Shipments slipped to negative 11 from positive 6, the Fed reported. Volume of new orders slid to negative 17 from positive 10, while the backlog of orders index widened to negative 19 from negative 11.

The capacity utilization index reversed to negative 18 from positive 3, while the vendor lead time index slid to negative 4 from positive 3. The number of employees index fell to negative 5 from negative 3, while the average workweek index was at negative 4 after a negative 2 reading last month, and the wages index climbed to 11 from 10.

As for future outlook (six months from now), the shipments index was 18, down from 20 last month, while the volume of new orders index grew to 18 from 12, and backlog of orders remained zero. Capacity utilization climbed to 10 from 4, the vendor lead time index increased to positive 4 from negative 3, the number of employees index dipped to zero from 2, while the average workweek index was at positive 5, up from negative 5 the previous month, and the wages index was 20, down from 21 last month. The capital expenditures index was 12 after 9 last month.

The finished goods inventories index surged to 23 from 12, while the raw materials index fell to 23 from 24 the previous month.

The current trend in prices paid rose to 2.54 in January from 2.01 in December, while dipping to 0.85 from 1.57 for prices received. The expected trend for the next six months fell to 1.97 from 2.54 for prices paid, and rose to 1.11 from 0.87 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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