By Maria Martinez
Factory activity in the U.S. central Atlantic region contracted in August, according to a survey from the Federal Reserve Bank of Richmond released Tuesday.
The Fifth District Survey of Manufacturing Activity’s index fell to minus 8 in August from 0 in July. Economists polled by The Wall Street Journal expected the indicator to come in at minus 5.
The index signals that factory activity declined over the month, as a negative reading indicates contraction.
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 tumbled: shipments and new orders.
The shipments index fell to minus 8 in August from 7 in July, while the new orders index declined to minus 20 from minus 10 the previous month. The third component, the employment index, rose to 11 in August from 8 in July.
The wage index remained elevated, despite a minor downward shift, indicating that a large share of firms continue to report increasing wages.
There was some indication of supply-chain improvement as the index for vendor lead time and backlog of orders both decreased in August, the Richmond Fed said.
The average growth rate of prices paid was virtually flat in August, while the average growth rate of prices received increased somewhat in August.
Manufacturers in the area remained optimistic about business conditions in the next six months, with the index gauging short-term expectations staying steady at minus 10 in August after marked improvement in July.
Write to Maria Martinez at [email protected]
