Richmond Fed: Manufacturing Declines

Manufacturing activity in the central Atlantic region "weakened in June," according to the monthly business activity survey conducted by the Federal Reserve Bank of Richmond, although the manufacturing index slipped to negative 7 in June from negative 1 in May.

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

Shipments narrowed to negative 3 from negative 8, the Fed reported. Volume of new orders dropped to negative 14 from zero, while the backlog of orders index declined to negative 17 from negative 13.

The capacity utilization index dropped to negative 10 from negative 6, while the vendor lead time index slipped to 1 from 6. The number of employees index fell to negative 1 from positive 4, while the average workweek index was at negative 4 after a positive 6 reading last month, and the wages index dipped to 14 from 15.

As for future outlook (six months from now), the shipments index was 9, down from 24 last month, while the volume of new orders index slid to 13 from 20, and backlog of orders fell to 1 from 10. Capacity utilization dropped to 2 from 11, the vendor lead time index grew to positive 3 from negative 1, the number of employees index fell to negative 1 from positive 2, while the average workweek index was at negative 8, off from positive 3 the previous month, and the wages index was 28, after 23 last month. The capital expenditures index rose to 14 from 10.

The finished goods inventories index gained to 27 from 19, while the raw materials index climbed to 26 from 25 the previous month.

The current trend in prices paid dipped to 1.25 in June from 1.27 in May, while growing to 0.88 from 0.77 for prices received. The expected trend for the next six months decreased to 1.38 from 1.47 for prices paid, and grew to 1.11 from 0.89 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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