Richmond Fed: Manufacturing, services expansion weaker in March

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Manufacturing and services growth in the central Atlantic region in March was weaker than in February, according to the monthly business activity survey conducted by the Federal Reserve Bank of Richmond, as the manufacturing index slipped to 10 from 16.

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

Shipments declined to 2 from 12, the Fed reported. Volume of new orders fell to 9 from 19, while the backlog of orders index widened to negative 13 from negative 7.

The capacity utilization index dropped to 1 from 8, while the vendor lead time index rose to 7 from 4. The number of employees index grew to 23 from 15, the available skills widened to negative 14 from negative 13, while the average workweek index slumped to 5 from 17, and the wages index grew to 33 from 29.

As for future outlook (six months from now), the shipments index was 40, up from 32 last month, while the volume of new orders index gained to 36 from 30, and backlog of orders rose to 16 from 11. Capacity utilization slid to 26 from 31, the vendor lead time index dipped to 2 from 3, the number of employees index dipped to 13 from 15, the available skills widened to negative 23 from negative 19, while the average workweek index reversed to positive 6 from negative 1 last month, and the wages index decreased to 41 from 51. The capital expenditures index rose to 24 from 16.

The current trend in prices paid declined to 2.84 in March from 3.03 in February, while climbing to 2.07 from 2.06 for prices received. The expected trend for the next six months decreased to 2.10 from 2.17 for prices paid, and dipped to 1.76 from 1.81 for prices received.

The service sector was not as strong in March.

Overall, the current service sector revenues index slumped to 5 from 17, services expenditures gained to 8 from 7, capital expenditures dipped to 13 from 15, while the number of employees index rose to 4 from 2, the available skills narrowed to negative 13 from negative 16, the wages index declined to 31 from 39, and the demand index soared to 16 from 5.

The expected service sector revenues index slid to 34 from 40, services expenditures rose to 15 from 9, capital expenditures decreased to 14 from 23, while the number of employees index grew to 33 from 32, the available skills narrowed to negative 7 from negative 13, the wages index fell to 56 from 65, and the demand index slid to 26 from 29.

The indexes are the percentage of responding firms reporting increase, less the percentage reporting a decrease.

The current prices paid trend dropped to 2.86 from 2.97, and climbed to 2.59 from 2.50 for prices received.

The expected price paid trend decreased to 2.17 in March from 2.70 in February, while prices received rose to 2.36 from 2.27.

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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Economic indicators Manufacturing industry Federal Reserve Bank of Richmond
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