03:46 PM EDT, 09/24/2024 (MT Newswires) -- Manufacturing activity in the US Mid-Atlantic region logged a surprise decline into deeper contraction territory this month as shipments and employment deteriorated further, data released Tuesday by the Federal Reserve Bank of Richmond showed.

The composite index fell to minus 21 in September from minus 19 in August. The consensus was for an improvement to a minus 12 print in a survey compiled by Bloomberg. "Fifth District manufacturing activity remained sluggish in September," the Richmond Fed wrote.

The gauge for shipments declined to minus 18 this month from minus 15 in August while the measure for number of employees dropped to minus 22 from minus 15. Orders improved to minus 23 from minus 26, the regional Fed's data showed.

Firms grew less pessimistic about local business conditions as the corresponding metric edged up to minus 18 from minus 24 month to month, the Richmond Fed said.

The annual growth rate for prices paid for raw materials advanced to 3.36% this month from 2.45% in August, while the rate for selling prices dipped to 1.57% from 1.87%.

Six months out, the index for orders halved to 7 in September from 14 in August and the metric charting shipments dipped eight points to 15, according to the Fed branch data. Both remain in positive territory, suggesting firms "expect improvements in these areas over the next six months," the Richmond Fed said.

The forward-looking indicator of local business conditions improved to minus 6 from minus 18 month over month. The future employment index fell to minus 12 this month from minus 7 in August.

Firms indicated that they expect growth rates of both raw material and selling prices to rise over the next 12 months.