By Joshua Kirby

Manufacturing activity in the U.S. central region improved sharply this month as shipments gathered pace, survey data from the Federal Reserve Bank of Richmond showed Wednesday.

The Fifth District Survey of Manufacturing Activity's index came in at zero, rising from minus seven in April and well ahead of economists' expectations for a slight downtick in the index. It marks the first time since October that the index has risen out of the negative territory that indicates a slowdown in activity.

"Fifth District manufacturing activity improved but remained sluggish in May," the Richmond Fed said.

The index is compiled by surveying 75 to 80 manufacturing firms across the Fifth Federal Reserve District, which comprises the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia.

Shipments rose sharply over the month, the index showed, with the gauge moving to clearly positive from clearly negative. New orders also improved, as did inventories.

By contrast, firms reported fewer employees and lower wages on average as the district's labor market loosened.

With inflation still running high in the U.S., average prices paid accelerated this month in the central district, the index showed, while growth in prices received eased. "Firms expect price growth to pick up slightly over the next 12 months," the Richmond Fed said.

Write to Joshua Kirby at; @joshualeokirby

(END) Dow Jones Newswires

05-29-24 1029ET