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Manufacturing activity in the Fifth District slowed further in April. The composite manufacturing index fell from -4 in March to -13 in April. Manufacturers continue to be less optimistic looking ahead, with the outlook for future local business conditions falling from -22 in March to -37 in April. The Fifth Federal Reserve District consists of Virginia, Maryland, the Carolinas, the District of Columbia and most of West Virginia.

Among its components, shipments and new orders fell markedly from -7 to -17 and from -4 to -15, respectively. Employment declined from -1 to -5, indicating hiring decreased further in April. The vendor lead time index dropped from 12 to 1 in April, while the share of firms reporting backlogs fell from -1 to -24. Companies are further depressed about local business conditions, with the index declining from -13 to -21. The average growth rates of prices paid and received increased.

Looking ahead, firms still expect both price indexes to rise in the next 12 months. Expectations for future shipments and new orders both declined considerably and turned negative, suggesting that firms anticipate significant deterioration in these areas over the next six months. Expectations for backlogs fell, moving from -6 to -30. Meanwhile, firms exhibited a more cautious approach to equipment and software spending, with expectations slipping from -8 to -16. Similarly, expectations for spending on capital expenditures edged down from -2 to -15. In sum, businesses in the Fifth District are much more hesitant about the prospects for future growth and making new investments.