Earlier today, the Richmond Federal Reserve Bank reported an uptick in manufacturing activity, with its index of current conditions rising from -6 in May to 3 in June.
Since it is a positive number, this represents growth in the Mid-Atlantic region, albeit at a slow pace. The improvement from the previous month was due to increases in new orders, shipments, and capacity utilization; however, some of these figures remain in negative territory. The indices for employment and hours worked fell somewhat, with wages moving up a little.
In addition, pricing pressures moderated from the previous month, but they are still rising at a 4.82 percent annual rate for raw materials. This is down from 6.12 percent in May, with the decline reflecting lower energy costs more than likely. The index for finished goods inventories went from 12 to 23.
Respondents remain optimistic about the next six months, with the index of new orders rising from 40 to 46. This reflects an increase from previous surveys, with similar positive sentiments on expected shipments, employment, and capital spending. Overall, these results show a modest improvement in manufacturing conditions in the Mid-Atlantic region, with businesses positive about increased output in the second half of 2011, suggesting that the industry is beginning to rebound from its more recent weaknesses.
Chad Moutray is chief economist, National Association of Manufacturers.