Manufacturing activity in the Mid-Atlantic States contracted in April according to the Federal Reserve Bank of Richmond. This was the third Fed district this month to report an unexpectedly soft manufacturing sector.
The Richmond Fed's manufacturing index dropped to -6 from 3 in March, analysts had predicted a reading of 2. The manufacturing index is a composite weighted average of shipments (33%) new orders (40%) and employment (27%) which assesses current business conditions covering Maryland, North and South Carolina, Virginia, Washington D.C. and most of West Virginia. A score above zero means business activity is expanding, below zero indicates contraction.
All of the composite component indices were lower on the month; shipments sank to -9 in April from 8 the prior month; new orders fell to -8 from -4 in March and 0 in February; the number of employees slipped to 3 this month from 9 in March. Several other gauges declined, including the work week which dropped to -3 from 10 in February and capacity utilization which fell to -18 from -3. The wages index rose to 12 from 4 and current prices were little changed at 1.27 in April from 1.28 previously.
Expectations for business activity in half a year were also sharply curtailed; the shipments index dropped to 25 from 31 in March; the orders index decreased to 26 from 31 and the employees plunged to 0 from 16
The Philadelphia and New York Fed districts had also reported weaker though still positive activity earlier in the month. The Philadelphia index sank to 1.3 in April from 2.0 in March, below the 3.0 forecast and the Empire Survey from the New York Fed skidded to 3.05 in April from 9.24 in March at about half the 7.0 forecast.
Chief Market Strategist