Economy

Richmond Fed Manufacturing Index Surges 12 Points in November

November 26, 2013

The Fifth District Manufacturing Index surged to 13 in November from an index reading of 1 in October. According to the Federal Reserve Bank of Richmond, almost all business activity indicators rose except for capacity utilization and backlog of orders, which were flat for the month.

The index for shipments advanced 18 points while the new orders index rose 15 points compared to October. Lead times were somewhat shorter and inventories were slightly leaner. Prices for raw materials and finished goods rose at a slower pace in November. Employment, wages and work week all rose during the month.

Manufacturing producers are expecting business conditions to continue to strengthen over the next six months. The index for future shipments rose 7 points to 37 and new orders rose 10 points to 33. Capital spending is expected to pick up and hiring to increase.

Manufacturers expect the slowing trend for input prices to continue in the coming six months, leading to an annualized rate of 1.75 percent. Finished goods prices are expected to increase at a 1.22 percent annualized rate, up from an expectation of 0.90 percent growth in the last survey.

The Fifth Federal Reserve District includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia.