03:50 PM EDT, 08/27/2024 (MT Newswires) -- Manufacturing activity in the US Mid-Atlantic region unexpectedly slid deeper into contraction territory in August as orders declined further, data released Tuesday by the Federal Reserve Bank of Richmond showed.

The composite index fell to minus 19 in August from minus 17 in July. The consensus was for an improvement to a minus 14 print in a survey compiled by Bloomberg. "Fifth District manufacturing activity slowed in August," the Richmond Fed wrote.

The gauge for new orders slid further into contraction at minus 26 from minus 23, while the measure for number of employees dropped to minus 15 from minus 5. Shipments improved to minus 15 from minus 21 month to month in August, the regional Fed's data showed.

Firms grew less optimistic about local business conditions as the corresponding metric dipped to minus 24 from minus 21, the Richmond Fed said.

The annual growth rate for prices paid for raw materials cooled to 2.45% this month from 3% in July while the rate for selling prices climbed to 1.87% from 1.31%.

Six months out, the index for orders fell to 14 in August from 20 in July, while shipments increased by one point to 23. Both remain "solidly in positive territory, suggesting that firms continued to expect improvements in these areas over the next six months," the Fed branch wrote.

The forward-looking indicator of local business conditions swung negative at minus 18 from 7. The index "fell notably" with fewer than 10% of respondents expecting conditions to improve in the coming six months, according to the report.

The future employment index swung negative at minus 7 in August from 3 in July. Firms indicated that they expect the growth rate of raw material prices to decline by roughly a percentage point and selling prices to accelerate over the next 12 months.