October 27th, 2014
Of the four Federal Reserve districts which have released their October manufacturing surveys, all are forecasting growth. A complete summary follows. [note that values above zero represent expansion].
The market was expecting -2.0 to 11.5 (consensus 7.5) versus the actual of 13.7.
Texas factory activity increased again in October, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell from 17.6 to 13.7, indicating output grew but at a slightly slower pace than in September.
Other measures of current manufacturing activity also reflected continued growth in October. The new orders index rose notably from 7.5 to 14.2, reaching a six-month high. The capacity utilization index edged down to 18.1 and the shipments index slipped to 12.8, although still more than a quarter of firms noted increases in these measures over September levels.
Perceptions of broader business conditions remained optimistic this month and outlooks improved markedly. The general business activity index held steady at a solid reading of 10.5. The company outlook index surged more than 12 points to 18.2, reaching its highest level in six months.
Labor market indicators reflected continued employment growth and longer workweeks. The October employment index posted a fifth robust reading, holding steady at 10.2. Nineteen percent of firms reported net hiring, compared with 9 percent reporting net layoffs. The hours worked index also held fairly steady, coming in at 8.3 after rising to 9.5 last month.
Upward pressure on prices and wages continued at about the same pace in October. The raw materials prices index was 19.7, nearly unchanged from its September reading. The finished goods prices index also held steady, at a reading of 7.1, with more than 80 percent of manufacturers noting no change in selling prices this month. The wages and benefits index showed little movement as well, edging down from 26.2 to 24.5.
Expectations regarding future business conditions remained optimistic in October. The index of future general business activity inched up to 13.3. Indexes for future manufacturing activity showed mixed movements in October but remained in solidly positive territory. The index for future employment shot up 13 points to 31.7, suggesting an increase in headcounts six months from now.
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):
/images/z philly fed1.PNG
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.