By Maria Martinez
Manufacturing activity across the central Atlantic region of the U.S. strengthened in October and posted its highest reading on record, data from a survey from the Federal Reserve Bank of Richmond showed Tuesday.
The Fifth District Survey of Manufacturing Activity's composite index came in at 29 in October, up from the 21 reading registered in September. The indicator beat forecasts from economists polled by The Wall Street Journal, which expected the index to be at 16.
The indicator is compiled by surveying manufacturing firms across the Fifth Federal Reserve District, which encompasses the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. Positive readings signal expansion, while negative readings indicate contraction.
October's reading posts a sixth consecutive month of improvement for the index, which plunged to a record low of minus 53 in April amid the lockdown to contain the spread of the coronavirus.
Two of the three components of the index--new orders and shipments--were above their September levels. Volume of new orders increased strongly to 32 from 27 a month earlier, and shipments climbed to 30 from 13 in September.
The remaining component, employment, remained unchanged at 23. The survey reflected higher employment among many participants in October and suggested several manufacturers raised wages over the month, the report said. However, firms struggled to find workers with the necessary skills.
Survey results also reflected improvement in business conditions and growing backlogs of orders. Respondents were optimistic that conditions would continue to improve in the next six months, the Richmond Fed said.
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(END) Dow Jones Newswires
October 27, 2020 10:32 ET (14:32 GMT)Copyright (c) 2020 Dow Jones & Company, Inc.