Fifth District Manufacturing Sector Expanded in December

Source: Federal Reserve Bank of Richmond

Fifth District manufacturing activity expanded in December. DXY up +0.16%, EUR USD down -0.27%

• The composite index increased from 12 in November to 16 in December, largely due to increases in shipments and new orders.
• The employment index flattened but remained in the expansionary zone.
• Meanwhile, backlogs of new orders posted their second-highest index value on record as vendor lead times remained elevated and inventories remained low.
• A majority of manufacturing firms reported an increase in employment in December. The firms reported that it was challenging to find workers with the necessary skills and expected the challenge to persist.
• Numerous firms also increased wages in December and are planning to keep increasing wages.
• The average growth pace of prices paid and prices obtained by the respondents increased in December. But firms expect the growth of prices paid and prices received to drag over the next year.