The following is the text of the Richmond Federal Reserve Bank’s manufacturing sector activity survey for March.
Manufacturing activity in the central Atlantic region expanded at a slower pace in March after rebounding in February, according to the Richmond Fed’s latest survey. Looking at the main components of activity, factory shipments and employment remained in positive territory, while the volume of new orders declined somewhat. Other indicators also suggested softer activity. Capacity utilization and delivery times turned negative, and the gauge for backlogs fell further. In addition, finished goods inventories grew at a slightly slower rate.
Looking ahead, manufacturers in March were more optimistic about their future business prospects. An increasing number of contacts anticipated faster growth for shipments, new orders, backlogs capacity utilization and capital expenditures compared to a month ago. Survey participants indicated that both raw materials and finished goods prices grew at a slightly slower pace than in February. Over the next six months, respondents expected both raw materials and finished goods prices to grow at a slightly slower rate than they had anticipated a month earlier.
In March, the seasonally adjusted composite index of manufacturing activity--our broadest measure of manufacturing-- lost three points settling at 3 from February’s reading of 6. Among the index’s components, shipments slipped two points to 8, the gauge for new orders moved down four points to end at -4, and the jobs index added one point to end at 9.
Other indicators also suggested weaker activity in March. The index for capacity utilization turned negative, losing fourteen points to -3, and the index for backlogs of orders dropped two points to finish at -14. The delivery times index edged down two points end at -2, while gauges for our inventories were mixed in March.The raw materials inventory index increased six points to finish at 22, and the finished goods inventories moved down two points to end at 10.
SOURCE: Federal Reserve Bank of Richmond
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