NEW YORK – “Manufacturing activity in the central Atlantic region expanded for the fourth straight month,” according to the monthly business activity survey conducted by the Federal Reserve Bank of Richmond. “Looking at the main components of activity, shipments edged slightly higher, while new orders inched lower and employment grew more slowly. Other indicators were also mixed but suggested continued solid activity. Backlogs continued their upward trend and capacity utilization matched its all time high reading seen in April. Vendor lead-time continued to grow at a solid pace; suggesting activity remained strong in May. Inventories grew at a somewhat slower pace.”
The manufacturing index decreased to 26 in May from 30 in April.
Shipments improved to 32 from 30, the Fed reported. Volume of new orders declined to 36 from 41, while the backlog of orders index gained to 16 from 5.
The capacity utilization index stayed at 27, while the vendor lead time index slid to 14, from 17 the prior month. The number of employees index decreased to 4 from 13, while the average workweek index was 13 after a 16 reading last month, and the wages index climbed to 20 from 6.
As for future outlook (six months from now), the shipments index was 55, up from 46 last month, while the volume of new orders index jumped to 50 from 44, and backlog of orders fell to 19 from 25. Capacity utilization jumped to 45 from 38, the vendor lead time index slid to 12 from 17, the number of employees index increased to 19 from 17, while the average workweek index was at 21, a decrease from 22 the previous month, and the wages index was 34, down from 43. The capital expenditures index was 20, after 23 last month.
The finished goods inventories index fell to 9 from 13, while the raw materials index dropped to 6 from 9. The current trend in prices paid rose to 2.33 in May from 2.11 in April, while falling to 1.83 from 2.08 for prices received. The expected trend for the next six months decreased to 2.69 from 2.79 for prices paid, and to 1.29 from 1.39 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.
