Input Stories

Manufacturing activity in the Fifth District declined in November and at a faster pace than the previous month, with the composite manufacturing index falling from -4 to -15. Meanwhile, the local business conditions index plummeted from -1 in October to -20 in November. Despite current weakness, manufacturers are more optimistic about the future, with the outlook for future local business conditions turning positive, rising from -5 in October to 1 in November. The Fifth District consists of Virginia, Maryland, the Carolinas, the District of Columbia and most of West Virginia.

Among its components, shipments fell back into negative territory, plunging from 4 to -14. New orders remained negative and contracted at a faster pace, dropping from -6 to -22 in November. Employment improved slightly, ticking up from -10 to -7, and the vendor lead time index rose from 6 to 12. Meanwhile, the share of firms reporting backlogs worsened, sinking from -16 to -23. The average growth rate of prices paid and prices received both quickened in November.

Looking ahead, firms expect both price indexes to increase in the next 12 months, with prices paid rising at a faster rate and prices received at a slower rate than forecasted in October. Expectations for future shipments jumped from 13 to 25, while new orders increased from 12 to 26. Expectations for backlogs moved up from -12 to 3. Meanwhile, firms’ expectations about equipment and software spending remained negative but improved from -6 to -4. On the other hand, expectations for capital expenditures worsened, falling from 1 to -8. In sum, businesses in the Fifth District are more optimistic about future business conditions while remaining pessimistic about future investment plans.