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Tuesday, October 23, 2012

Richmod Fed Mfg Survey indicates contraction in October

by Calculated Risk on 10/23/2012 10:00:00 AM

From the Richmond Fed: Manufacturing Activity Pulled Back in October; Optimism Wanes

Manufacturing activity in the central Atlantic region pulled back in October after improving somewhat last month, according to the Richmond Fed's latest survey. The seasonally adjusted index of overall activity was pushed lower as all broad indicators of activity — shipments, new orders and employment — were in negative territory.
Looking forward, assessments of business prospects for the next six months were less optimistic in October. Contacts at more firms anticipated that new orders, backlogs, capacity utilization, and vendor lead-times will grow more slowly than anticipated a month ago.
In October, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — lost eleven points to −7 from September's reading of 4. Among the index's components, shipments fell eighteen points to −9, new orders moved down thirteen points to finish at −6, and the jobs index held steady at −5.
This suggests contraction in manufacturing activity in the central Atlantic region. It appears some of this contraction may be due to the European recession and reduced exports to Europe.