By Xavier Fontdegloria
Manufacturing activity in the central Atlantic region of the U.S. grew in November at broadly the same pace as in the previous month, according to a survey compiled by the Federal Reserve Bank of Richmond released Tuesday.
The Fifth District Survey of Manufacturing Activity’s composite index came in at 11 in November, down from 12 in October, missing economists forecast of 17 in a poll carried out 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.
The three component indexes which form the composite indicator–shipments, employment and new orders–stood in expansion territory, but their moves compared with the previous month were mixed, data from the Richmond Fed showed.
The shipments index increased to four from one the previous month, signaling a modest increase in shipments. The volume of new orders index fell to five from 10, and the employment index was unchanged at 27.
The index for finished goods inventories reached its lowest value on record as many firms reported that inventories were too low, the Richmond Fed said.
Vendor lead times and backlogs of orders continued to grow, but showed tentative signs that the current supply-chain bottlenecks could be easing as the indexes gauging both indicators fell compared with the previous month. Still, the average growth rates of both prices paid and prices received by survey respondents declined somewhat in November.
Survey results also suggested that many firms increased employment and wages in November, but they struggled to find workers with the necessary skills. Survey respondents expected these trends to continue in the next six months, the Richmond Fed said.
Goods producers in the region remained optimistic about the short-term outlook. The future indexes for shipments and new orders were unchanged at 33 and 27, respectively, while expectations for employment decreased slightly to 43 from 45 the previous month.
Write to Xavier Fontdegloria at [email protected]
(END) Dow Jones Newswires
11-23-21 1040ET
