In July, the Richmond manufacturing index in the United States fell significantly, remaining in negative territory for the fifth consecutive month.

On Tuesday, the latest manufacturing survey released by the Federal Reserve Bank of Richmond in the United States showed that manufacturing activity in the Fifth District deteriorated further in July, with the composite manufacturing index falling sharply by 12 points to -20, well below the market expectations of -2. It has been in negative territory for the fifth consecutive month, indicating that manufacturing in the region is in a continuous contraction. According to the report, all three sub-indices that make up the composite index fell across the board. The shipments index dropped from -5 in June to -18, the new orders index fell from -12 to -25, indicating continued declining demand; the employment index also deteriorated further from -6 to -16, indicating that manufacturing companies are more cautious in hiring personnel. Despite the overall pressure, local companies are slightly optimistic about the future. The local business conditions index for July rose to -11, and the expected local business conditions index rose from -7 to -2. The future shipments and new orders indices both rose to 11 and 9 respectively, higher than the 6 in June, but the employment expectations index fell from -4 to -10, reflecting a pessimistic outlook on labor demand. In terms of supply chain-related indicators, the supplier delivery time index fell from 9 in June to 7, while the order backlog index deteriorated from -18 to -30, indicating a significant easing of the backlog of orders for companies, which may suggest that overall demand is still weak. In terms of prices, the average growth rates for prices paid and received by companies in July both slowed down. Companies expect the growth in prices paid in the next 12 months to remain stable, but the growth expectations for prices received have increased slightly, indicating stable cost pressures and slight improvement in pricing power. The Richmond Manufacturing Index is an important indicator of manufacturing activity in the Fifth Federal Reserve District, which includes most of Maryland, North Carolina, Washington D.C., Virginia, most of West Virginia, and South Carolina. The index has been published since November 1993, based on surveys of about 100 manufacturing companies, covering shipments, new orders, order backlogs, capacity utilization, supplier delivery times, number of employees, average hours worked, wages, inventories, and capital expenditures among other sub-indices. As a diffusion index, a positive value of the Richmond Manufacturing Index represents expansion, while a negative value represents contraction. The index is typically seen as an important leading indicator for measuring the health of manufacturing, inflation pressures, and future economic growth trends in the region. Overall, the survey data for July 2025 reflects significant challenges facing manufacturing in the Southeastern United States. High interest rates, declining orders, and weak employment are the main drag factors, and there remains uncertainty in the industry's outlook for the coming months.