All three regional surveys released to date show manufacturing expanding in October 2013 – but the Richmond Fed survey is very soft.
Manufacturing in the Fifth District remained weak in October, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments, capacity utilization, and the backlog of orders declined. The volume of new orders flattened, while vendor lead-time rose. Finished goods inventories and raw materials inventories also increased in October. Although the average workweek was little changed, manufacturing employment picked up slightly and average wages continued to grow.
Manufacturers’ outlook for the six months ahead was optimistic, though somewhat less buoyant than in recent months. Firms anticipated shipments and the volume of new orders would increase substantially, along with increased capacity utilization. They expected a build-up in their backlog of orders, and a smaller rise in vendor lead-time than they were currently experiencing. Survey participants also continued to anticipate greater capital expenditures. Additionally, producers expected that the number of employees would increase, along with a mild rise in the average workweek. Expectations were for stronger wage growth during the next six months.
Manufacturing price growth moderated in October, with the annualized increases in raw materials and finished goods below last month’s. Further, manufacturers expected prices paid and received would rise more slowly over the next six months.
Current Activity
The composite index of manufacturing activity settled at 1 in October, remaining close to last month’s neutral reading. The index for shipments slipped a point lower to −2, and the index for new orders dropped five points, flattening to 0. The third component of the composite, employment, gained 10 points to end the survey period at 4.
Vendor lead-time rose, pushing the index to 11 from a reading of 1. The index for the backlog of orders dropped to −15 from −7, and the indicator for capacity utilization fell six points to −5. Both finished goods inventories and raw materials inventories grew more quickly than a month earlier, with those gauges rising to 14 and 16, from 11 and 14.
Read entire source document from Richmond Fed
Summary of all Federal Reserve Districts Manufacturing:
Richmond Fed (hyperlink to reports):
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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 (lighter blue bar) to the Richmond Fed Survey (dark green bar).
Comparing Surveys to Hard Data
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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.
