Of the five Federal Reserve districts which have released their September manufacturing surveys, all are forecasting growth. A complete summary follows. [note that values above zero represent expansion].
The market was expecting 9.0 to 11.5 (consensus 10.3) versus the actual of 17.6.
Texas factory activity increased again in September, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose markedly from 6.8 to 17.6, indicating output grew at a faster pace than in August.
Other measures of current manufacturing activity also reflected significantly stronger growth in September. The new orders index climbed 5 points to 7.5. The capacity utilization index surged to 20.2 after dipping to 3.6 in August, with nearly a third of manufacturers noting an increase. The shipments index rebounded to 15.9 after falling to 6.4 last month.
Perceptions of broader business conditions were more optimistic this month. The general business activity index moved up to a reading of 10.8, nearly four points above its nonrecession average of 7. The company outlook index rose from 1.5 to 5.8, due to a larger share of firms noting an improved outlook in September than in August.
Labor market indicators reflected continued employment growth and longer workweeks. The September employment index posted a fourth robust reading, holding fairly steady at 10.6. Twenty-four percent of firms reported net hiring compared with 14 percent reporting net layoffs. The hours worked index rose to a five-month high of 9.5, indicating a stronger rise in hours worked than in recent months.
Upward pressure on prices eased slightly in September, while wage pressure increased. The raw materials price index fell seven points to a reading of 19.5. The finished goods price index also fell but to a lesser degree, edging down from 9.1 to 7. The wages and benefits index, however, ticked up for the second month in a row and came in at 26.2, its highest reading since before the Texas recession began in mid-2008.
Expectations regarding future business conditions remained optimistic in September. The index of future general business activity fell from 18.7 to 12.1, while the index of future company outlook rose from 30.1 to 32.3. Indexes for future manufacturing activity generally moved down in September but remained in solidly positive territory.
Source: Dallas Fed
Summary of all Federal Reserve Districts Manufacturing:
Richmond Fed (hyperlink to reports):
Kansas Fed (hyperlink to reports):
Dallas Fed (hyperlink to reports):
Philly Fed (hyperlink to reports):
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New York Fed (hyperlink to reports):
Federal Reserve Industrial Production - Actual Data (hyperlink to report)
Holding this and other survey's Econintersect follows accountable for their predictions, the following graph compares the hard data from Industrial Products manufacturing subindex (dark blue bar) and US Census manufacturing shipments (lighter blue bar) to the Dallas Fed survey (light blue bar).
Comparing Surveys to Hard Data
In the above graphic, hard data is the long bars, and surveys are the short bars. The arrows on the left side are the key to growth or contraction.