The newest report from the Federal Reserve Bank of Richmond states manufacturing activity in its area increased in May. Also expectations are positive. Producers believe the growth rate of shipments will slow, but also anticipate an increase in new orders and backlog.
The report states the cost of raw materials and the finished products rose faster in May than in April. The price of raw materials increased at a 1.36 percent annualized rate, compared to April's 0.78 percent annualized rate. Finished goods rose a 0.56 percent annualized rate while in April the annualized rate was 0.30 percent.
Employment remains steady with an increase in the average wage, according to the Federal Reserve Bank of Richmond. The index gained six points in May and the average workweek grew slightly faster this month than last month. The index for average wages improved by 16 points.
Hiring will likely be slow in the upcoming months and the employment index lots two points, ending at 12 in May. However, the expectation that the average wage will improve remains strong as the index added four points in May.
The U.S. manufacturing survey by Markit echoes the findings of the Federal Reserve Bank of Richmond and discovered that operating conditions in the sector continued to improve in May. Markit found the manufacturing industry grew as new orders came in and companies worked on outstanding contracts. In fact, production was the stronger from April to May than it has been since February 2011.
Markit learned employment rose for the 11th month in a row, though the rate was slower than at the beginning of the year. The improvement in employment is due to the increase in new orders as well as companies working on their backlog. The company also found businesses anticipate further growth in the workforce this year.
Manufacturing businesses experiencing an increase in new orders and production should partner with manufacturing recruiters in their area to help them find the most qualified candidates for their open positions.