Richmond Fed: Respondents optimistic as expansion continues in June

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Manufacturing growth in the central Atlantic region “continued to expand in June,” according to the monthly business activity survey conducted by the Federal Reserve Bank of Richmond, as the manufacturing index gained to 20 from 16.

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

“The composite manufacturing index rose from 16 in May to 20 in June, buoyed by an increase in all three components (shipments, new orders, and employment),” the survey noted.

Shipments grew to 17 from 15, the Fed reported. Volume of new orders rose to 22 from 16, while the backlog of orders index gained 19 from 7.

The capacity utilization index declined to 15 from 19, while the vendor lead time index held at 17. The number of employees index increased to 22 from 18, while the average workweek index rose to 12 from 9 last month, and the wages index slid to 27 from 28.

As for future outlook (six months from now), the shipments index was 46, up from 41 last month, while the volume of new orders index increased to 45 from 36, and backlog of orders soared to 28 from 15. Capacity utilization grew to 36 from 32, the vendor lead time index rose to 23 from 16, the number of employees index rose to 35 from 26, while the average workweek index was at 13, up from 7 the previous month, and the wages index was 39, after a 40 reading last month. The capital expenditures index gained to 33 from 24.

The current trend in prices paid rose to 3.52 in June from 2.39 in May, while growing to 1.86 from 1.75 for prices received. The expected trend for the next six months slid to 1.97 from 2.18 for prices paid, and fell to 1.48 from 1.74 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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Economic indicators Manufacturing industry Federal Reserve Bank of Richmond