By Xavier Fontdegloria
Manufacturing activity across the central Atlantic region of the U.S. expanded in March at slightly quicker pace than that of the previous month, data from a survey from the Federal Reserve Bank of Richmond showed Tuesday.
The Fifth District Survey of Manufacturing Activity's composite index was 17 in March, up from 14 in February. The reading is broadly in line with forecasts from economists polled by The Wall Street Journal, who expected the indicator to come in at 16.5.
The index 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.
Manufacturing activity in the area has been expanding uninterruptedly since July 2020, but the expansion pace has slowed significantly in recent months from a record-high peak reached in October.
The increase in the headline index in March was driven by a sharp increase in shipments, while new orders and employment held steady compared with the previous month.
The new orders index remained at 10, while the shipments index surged 10 points to 22, the data showed.
The employment index steadied at 22, signaling that manufacturers increased employment and wages in March. However, finding workers with the necessary skills remained difficult and survey participants expected these trends to continue in the next six months, the Richmond Fed said.
Businesses reported lengthened vendor lead times, as this index rose to 61 in March from 46 in February, breaking a 25-year-record for the third month in a row.
The average growth rates of both prices paid and prices received by survey participants increased in March, as growth of prices paid continued to outpace that of prices received. Respondents expected the gap to narrow in the near future, the report said.
Future indexes for new orders and shipments improved, while expectations for employment decreased somewhat, data from the report showed.
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(END) Dow Jones Newswires
March 23, 2021 10:34 ET (14:34 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.