May 2021 Richmond Fed Manufacturing Survey Marginally Improves

Of the three regional Federal Reserve manufacturing surveys released to date, all are in expansion.

Market expectations from Econoday were 15 to 19 (consensus 15). The actual survey value was 18 [note that values above zero represent expansion].

Fifth District manufacturing activity strengthened in May, according to the most recent survey from the Richmond Fed. The composite index inched up from 17 in April to 18 in May, as all three component indexes— shipments, new orders, and employment— reflected growth. A majority of firms reported lengthening vendor lead times, as this index reached a record high, along with the backlog of orders index. Meanwhile, the index for raw materials inventories reached a record low. Overall, manufacturers reported improved business conditions.

Survey results indicated that many firms increased employment and wages in May. However, they struggled to find workers with the necessary skills, as this index dropped to its lowest value on record. Survey respondents expected workers to remain difficult to find and employment and wages to increase further in the next six months.

The average growth rates of both prices paid and prices received by survey participants rose in May, as growth of prices paid continued to outpace that of prices received. Respondents expected price growth to slow somewhat in the next year.

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Richmond Fed (hyperlink to reports):

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Summary of all Federal Reserve Districts Manufacturing:

Kansas Fed (hyperlink to reports):

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Dallas Fed (hyperlink to reports):

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Philly Fed (hyperlink to reports):

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New York Fed (hyperlink to reports):

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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 (red bar) to the Richmond Fed survey (darkest bar).

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.

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