Richmond Fed: Manufacturing activity was ‘robust’ in May
Manufacturing growth in the central Atlantic region was “robust” in May, according to the monthly business activity survey conducted by the Federal Reserve Bank of Richmond.
The Richmond Fed on Tuesday reported that the manufacturing index rose to 16 this month from negative 3 in April.
The gain was boosted “by growth in the indexes for shipments, new orders, and employment. Local business conditions also moved back into expansionary territory, after weakening in April, and firms remained optimistic that growth would continue in coming months,” the report said.
Index readings above zero show expansion, while numbers below zero indicate contraction.
Shipments rose to 15 in May from negative 8 in April, the Fed reported. Volume of new orders gained to 16 from negative 9, while the backlog of orders index increased to 7 from negative 4.
The capacity utilization index jumped to 19 from negative 4, while the vendor lead time index slipped to 17 from 18. The number of employees index increased to 18 from 12, while the average workweek index rose to 9 from 8 as the wages index rose to 28 from 27.
As for future outlook (six months from now), the shipments index rose to 41 from 39 last month, while the volume of new orders index decreased to 34 from 36 and backlog of orders rose to 15 from 14. Capacity utilization increased to 32 from 25, the vendor lead time index rose to 16 from 12, the number of employees index fell to 26 from 34, while the average workweek index dropped to 7 from 10 and the wages index fell to 40 from 47.
The current trend in prices paid rose to 2.63 in May from 2.43 in April, while increasing to 1.75 from 1.46 for prices received. The expected trend for the next six months slid to 2.18 from 2.52 for prices paid and fell to 1.74 from 1.91 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.