By According to data from the Federal Reserve Bank of Richmond, manufacturing activity in the U.S. central Atlantic region has improved slightly but was generally flat in June. The Fifth District Survey of Manufacturing Activity’s index increased to minus 7 in June compared to minus 15 in May, rather than staying completely flat at minus 15 as expected by economists in a poll by The Wall Street Journal.
The Index and its Components
The index is compiled by surveying manufacturing firms across the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. Two of the three component indexes which form the composite indicator, new orders and shipments, improved from last month but remained in negative territory in June, indicating that demand conditions remain under pressure. The employment index, the other component to calculate the headline indicator, fell slightly to 2 in June from 5 in May, suggesting a downstep in employment levels among manufacturing firms.
Growth Rate of Price Pressures
The growth rate of price pressures at factory gates eased some in June, though not as much as they did in May. Firms continue to expect that growth rates will moderate over the next 12 months, the Richmond Fed said.
Local Business and Next Six Months
Firms in the area grew more optimistic about local business conditions and were more upbeat when asked about the outlook for the next six months.
In conclusion, while manufacturing activity in the U.S. central Atlantic region improved slightly, it should be noted that demand conditions remain under pressure.
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