So far, Federal Reserve districts which have released their May surveys – two are forecasting growth and three are forecasting contraction. A complete summary follows.
Texas factory activity increased sharply in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from -0.5 to 11.2, indicating a notable pickup in output.
Stronger manufacturing activity was reflected in other survey measures as well. The new orders index rebounded to 6.2 after falling to -4.9 in April. Similarly, the shipments index bounced back to 3.1 after dipping to -0.4. The capacity utilization index came in at 6.4, up from 2.7 last month.
Perceptions of broader business conditions continued to worsen in May. The general business activity index remained negative but moved up five points to -10.5. The company outlook index declined from -2.2 to -6.8, reaching its lowest level since July 2010.
Labor market indicators reflected weaker labor demand. The employment index fell to -6.3 in May, registering its first negative reading this year and reaching its lowest level since November 2009. Eight percent of firms reported hiring new workers compared with 15 percent reporting layoffs. The hours worked index came in at -2.3, suggesting the workweek shrunk further.
Price movements were mixed in May; input prices and wages rose while selling prices declined. The raw materials price index was 6.4, above the April reading but still below the levels seen over the last eight months. The wages and benefits index edged down to 14, although the great majority of manufacturers continued to note no change in compensation costs. The finished goods price index pushed further negative to -8.3, its lowest reading since July 2010. Looking ahead, 30 percent of respondents anticipate further increases in raw materials prices over the next six months, while 19 percent expect higher finished goods prices.
Expectations regarding future business conditions were mixed. The index of future general business activity remained negative but moved up from -6.7 to -2.6. The index of future company outlook was positive although it edged down to 5.3. Indexes for future manufacturing activity remained in strong 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.