Of the four regional Federal Reserve surveys released to date, all show manufacturing expanding in August 2014. A complete summary follows. The market expected this survey index at 4 to 12 (consensus 8.0) versus the 12 actual [note that values above zero represent expansion].
Fifth District manufacturing activity continued to improve in August, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders picked up this month. Although manufacturing employment and average wages rose at a slower pace this month, the average workweek lengthened.
Manufacturers anticipated stronger business conditions during the next six months. Firms expected faster growth in shipments and new orders in the six months ahead. Additionally, survey participants looked for increased capacity utilization and expected order backlogs to grow more quickly. Expectations were for longer vendor lead times.
Survey participants’ outlook for the months ahead also included faster growth in average wages and the average workweek, with a pickup in hiring. Prices of raw materials and finished goods rose at slower pace in August compared to last month. In contrast, manufacturers expected faster growth in prices paid and prices received over the next six months.
Current Activity
Overall, manufacturing conditions continued to improve in August. The composite index for manufacturing climbed to a reading of 12, the highest reading since March 2011. The index for shipments gained seven points and the new orders index advanced eight points, finishing at readings of 10 and 13, respectively. Manufacturing employment grew more slowly this month; the employment indicator slipped two points to a reading of 11.
Backlogs rose at a faster pace this month; the index jumped to a reading of 15. Additionally, capacity utilization grew at a faster pace, pushing the index up 13 points ending at 17. Vendor lead time lengthened, moving the index to 16 from a reading of 12 last month. Finished goods inventories rose at a faster pace compared to a month ago. The index gained four points, ending at 16. In contrast, raw materials inventories increased at a slower rate compared to last month. That gauge moved to 17 from 21.
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.
