Mid-Atlantic Manufacturing Activity Strengthened in May — Richmond Fed
Manufacturing activity across the central Atlantic region of the U.S. continued growing in May, data from a survey from the Federal Reserve Bank of Richmond showed Tuesday.
The Fifth District Survey of Manufacturing Activity’s composite index was 18 in May, up from 17 in April. The reading is in line with the forecasts from economists polled by The Wall Street Journal.
The index is compiled by surveying manufacturing firms across the Fifth Federal Reserve District, which encompasses the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. Positive readings signal expansion, while negative readings indicate contraction.
Manufacturing activity in the area has been expanding uninterruptedly since July 2020, but the expansion pace has slowed significantly in recent months from a record-high peak reached in October.
The headline index in May remained in expansion territory as all three component indexes–shipments, new orders and employment–remained positive.
The new orders index rose to 18 in May from 16 in April, while the shipments index fell to 12 from 16, the data showed.
The employment index rose to 25 from 19, but remained in expansion, signaling that manufacturers increased employment and wages in May. However, finding workers with the necessary skills remained difficult and survey participants expected these trends to continue in the next six months, the Richmond Fed said.
Businesses reported lengthened vendor lead times, as this index rose to 69 in May from 61 in April, breaking a new record high.
The average growth rates of both prices paid and prices received by survey participants increased in May, as growth of prices paid continued to outpace that of prices received. Respondents expected price growth to slow in the near future, the report said.
Future indexes for new orders and shipments remained unchanged, while expectations for employment increased, data from the report showed.
Source: Dow Jones