Richmond Fed Manufacturing Improved but Remained Sluggish in May

Fifth district manufacturing activity improved but remained sluggish in May, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index rose to 0 this month from -7 in April, ending the streak of 6 consecutive negative readings. This month's reading was better than the forecast of -6.

Here is an excerpt from the latest Richmond Fed manufacturing report:

Fifth District manufacturing activity improved but remained sluggish in May, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index increased from -7 in April to 0 in May. Of its three component indexes, shipments increased from -10 to 13, new orders increased from -9 to -6, and employment fell from -2 to -6.

Background on Richmond Fed Manufacturing

The complete data series behind today's Richmond Fed manufacturing report, which dates from November 1993, is available here. The Richmond Manufacturing Index is a gauge of manufacturing activity in the Fifth Federal Reserve District (Maryland, North Carolina, the District of Columbia, Virginia, most of West Virginia, and South Carolina) compiled from a survey of ~100 manufacturers. The composite manufacturing index is an average of indexes on shipments, new orders, order backlogs, capacity utilization, supplier lead times, number of employees, average work weak, wages, inventories, and capital expenditures. This is a diffusion index, meaning negative readings indicate contraction and worsening conditions, while positive ones indicate expansion and improving conditions. The survey offers clues on inflationary pressures and the pace of growth in the manufacturing sector for this region of the country and the accumulated results can help trace long-term trends.