Fifth District manufacturing activity remained slow in October, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index increased from −21 in September to −14 in October.
Of its three component indexes, shipments increased from −18 to −8, new orders rose from −23 to −17, and employment increased from −22 to −17.
The local business conditions index increased modestly but remained in negative territory, while the index for future local business conditions increased notably from −6 to 21 in October. The future indexes for shipments and new orders both increased further into positive territory, suggesting that firms continued to expect improvements in these areas over the next six months.
The vendor lead time index increased from −4 in September to 6 in October. On balance, firms continued to report declining backlogs in October as that index remained negative.
The average growth rate of prices paid decreased in October, while the average growth rate of prices received increased slightly. Firms expected little change in price growth over the next 12 months
CFOs Remain Optimistic for 2024
CFOs remain largely optimistic about their economic trajectory as they plan for the last quarter of 2024. Despite increased concerns around the health of the overall economy and some uncertainty related to the upcoming election, respondents said they still expect employment and revenue growth in the third quarter.
CFOs’ Most Pressing Concerns
Monetary policy remained the top concern for CFOs for the fifth consecutive quarter. However, concerns about inflation dropped quite a bit since the second quarter survey.
CFOs’ Expectations for Their Firms’ Performance
The third quarter CFO Survey shows that employment expectations jumped slightly, while revenue, price, unit cost, and wage bill expectations all decreased.
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