Of the four regional Federal Reserve surveys released to date, all show manufacturing expanding in May 2014. A complete summary follows. The market expected this survey index at 4 to 10 (consensus 9) versus the 10 actual [note that values above zero represent expansion].
Fifth District manufacturing activity increased at a steady pace of growth, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments rose, although new orders softened. Manufacturing employment firmed, and average wages increased sharply. The average workweek increased at about last month’s pace.
Manufacturers’ expectations were generally for improved business conditions. Despite a slightly weaker outlook for shipments, producers anticipated solid growth in new orders and rising backlogs. Firms expected capacity utilization to grow at a faster pace compared to last month’s expectations.
Current prices of raw materials and finished goods rose at a faster pace in May compared to last month. Manufacturers expected faster growth in prices paid and prices received over the next six months.
Overall, manufacturing conditions improved. The composite index for manufacturing held steady at a reading of 7 during the past two months. The index for shipments gained four points, ending at 10, while the index for new orders softened seven points, finishing at a reading of 3. Manufacturing employment picked up this month; the May indicator advanced six points to a reading of 10.
Vendor lead time lengthened, moving the index to 5 from a reading of 3, and the backlog of orders flattened to 1 from −9. The capacity utilization gauge slipped three points this month ending at −2.
Finished goods inventories built up at nearly the same pace as a month earlier. The index shed a point, ending at 14. Raw materials inventories grew more quickly. That gauge moved to 9 from 7.
Read entire source document from Richmond 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 Richmond Fed Survey (dark green 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.