NEW YORK – “Manufacturing activity in the central Atlantic region paused in May, after expanding during the previous seven months,” according to the monthly business activity survey conducted by the Federal Reserve Bank of Richmond. “The index of overall activity was pushed into negative territory by weak readings for shipments and new orders, while employment growth held steady. Other indicators suggested additional softness. District contacts reported that capacity utilization turned negative and backlogs fell further, while delivery times grew more slowly. In addition, manufacturers reported an uptick in finished goods inventory growth.”
The manufacturing index decreased to negative 6 in May from positive 10 in April.
Index readings above zero show expansion, while numbers below zero indicate contraction.
Shipments slid to negative 13 from positive 6, the Fed reported. Volume of new orders fell to negative 15 from positive 10, while the backlog of orders index decreased to negative 19 from negative 1.
The capacity utilization index decreased to negative 12 from positive 2, while the vendor lead time index slipped to 5 from 18. The number of employees index held at 14, while the average workweek index was zero after a 7 reading last month, and the wages index slid to 6 from 22.
As for future outlook (six months from now), the shipments index was 37, up from 31 last month, while the volume of new orders index increased to 40 from 38, and backlog of orders slid to 22 from 27. Capacity utilization declined to 27 from 28, the vendor lead time index slipped to 8 from 12, the number of employees index remained at 17, while the average workweek index was at 14, up from 12 the previous month, and the wages index was 28, down from 30 last month. The capital expenditures index was 26, after 29 last month.
The finished goods inventories index rose to 12 from 10, while the raw materials index fell to 16 from 18. The current trend in prices paid grew to 6.12 in May from 4.81 in April, while growing to 3.36 from 2.60 for prices received. The expected trend for the next six months decreased to 3.63 from 3.88 for prices paid, and fell to 2.41 from 3.02 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.
