Richmond Fed Survey of Manufacturing Activity: Manufacturing activity in the Fifth District remained sluggish in September. The Fifth Federal Reserve District consists of Virginia, Maryland, the Carolinas, the District of Columbia and most of West Virginia. The composite manufacturing index slipped from -19 in August to -21 in September. Among its components, shipments decreased from -15 to -18, new orders increased from -26 to -23, and employment dropped from -15 to -22. The vendor lead time index remained in negative territory but at the same level as August, and firms continued to report declining backlogs. Companies also grew slightly less pessimistic about local business conditions, but the index remained solidly in negative territory. The average growth rate of prices paid increased in September, while the rate of prices received decreased modestly.
Expectations for future shipments and new orders both decreased but remained positive, suggesting that firms still anticipate improvement in these areas. Meanwhile, expectations for backlogs improved but remained in negative territory. While the outlook for future local business conditions improved dramatically, the indicator also stayed negative. Firms continue to exhibit a more cautious approach to equipment and software spending, as expectations became more negative. On the other hand, spending on capital expenditures improved, but was still slightly negative.
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