Manufacturing Growth Flat in May in Central-Atlantic Region

Manufacturing growth flattened in May
The Federal Reserve Bank of Richmond released the May Manufacturing Conditions Survey this morning covering activity in the central Atlantic region. Manufacturing flattened in May following a marked pickup in March and April.

The seasonally adjusted manufacturing index, the broadest measure of manufacturing activity, fell to 1 from April’s reading of 18. Among the index’s components, shipments plunged twenty points to 2, and new orders plummeted eighteen points to end at 3. The jobs index contracted ten points to -3.

Other indicators were primarily flat. The level of raw materials inventories remained constant, whereas the level of finished goods inventories grew more quickly in May. The raw materials inventories index held steady at 10, while the finished goods inventories index gained five points to 18. In contrast, the capacity utilization index grew more slowly, losing nine points to 4.

Moving forward
In May, confidence was steady, though somewhat less so about their business prospects for the coming six months. The index of expected shipments fell six points to 35, while the new orders indicator held steady at 32.

Manufacturers’ plans for hiring in coming months were changed slightly from last month. The expected indexes for both manufacturing employment and the average workweek were unchanged at 14, and 11, respectively. The expected wage index, however, posted a four-point loss to 33.

Manufacturing Activity Index. Source: Federal Reserve Bank of Richmond.