Of the five Federal Reserve districts which have released their June manufacturing surveys, all are forecasting growth. A complete summary follows. [note that values above zero represent expansion].
Texas factory activity increased again in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 11 to 15.5, indicating output grew at a faster pace than in May.
Other measures of current manufacturing activity also reflected growth in June. The new orders index rose from 3.8 to 6.5 but remained below the levels seen earlier in the year. The capacity utilization index held steady at 9.2. The shipments index came in at 10.3, similar to its May level, with nearly a third of manufacturers noting an increase in volumes.
Perceptions of broader business conditions were more optimistic this month. The general business activity index rose from 8 to 11.4. The majority of respondents noted no change from May levels, although some 20 percent noted an increase in activity. The company outlook index rose 4 points to 8.4 after falling sharply last month.
Labor market indicators reflected stronger employment growth and longer workweeks. The June employment index rebounded to 13.1 after dipping to 2.9 in May. Twenty-one percent of firms reported net hiring compared with 8 percent reporting net layoffs. The hours worked index edged up from 2.8 to 4.7, indicating a slightly stronger rise in hours worked than last month.
Upward pressure on prices and wages was seen in June. The raw materials price index posted a second strong positive reading this month and inched up to 27.3. The finished goods price index rose slightly as well but remained in single digits, at 7.4. Looking ahead, 39 percent of respondents anticipate further increases in raw materials prices over the next six months, while 30 percent expect higher finished goods prices. The wages and benefits index edged down for the second month in a row, coming in at 18.8, but still suggested a rise in compensation costs.
Expectations regarding future business conditions were more optimistic in June. The index of future general business activity rose 7 points to 18.7, while the index of future company outlook rose 14 points to 33.8, reaching its highest level since 2011. Indexes for future manufacturing activity also pushed further into 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.