Of the four regional Federal Reserve surveys released to date, only three show manufacturing expanding. A complete summary follows. The market expected this survey index at 5 to 11 (consensus 7.0) versus the 7.0 actual [note that values above zero represent expansion].
Fifth District manufacturing activity grew modestly in December, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders edged up. Manufacturing employment grew at a faster pace this month, while average wages and the average workweek grew at a slightly slower pace than a month ago.
Producers anticipated improved business conditions during the next six months. Manufacturers expected faster growth in shipments and in the volume of new orders. Additionally, survey participants expected order backlogs to grow and anticipated increased capacity utilization. Expectations were for only slightly longer vendor lead times.
Firms expected faster growth in the number of employees and looked for average wages to grow more quickly in the months ahead. In contrast, survey participants looked for continued mild growth in the average workweek. Prices of raw materials and finished goods rose at a slower pace in December compared to last month. Manufacturers expected faster growth in prices paid in the months ahead. However, producers expected little change in prices received over the next six months.
Overall, manufacturing activity grew modestly in December. The composite index for manufacturing gained three points from a month earlier to finish at a reading of 7. The index for shipments gained four points and the new orders index advanced three points, finishing at readings of 5 and 4, respectively. Manufacturing employment grew more quickly this month. At an index of 13, the December indicator gained three points from last month’s reading of 10.
Capacity utilization decreased this month. The index fell 18 points from November’s reading to finish at an index of −5. Additionally, backlogs softened further this month, pulling the index down three points to finish at −5. Vendor lead time lengthened at a slightly slower pace, moving the index down five points to a reading of 2. Finished goods inventories rose more quickly compared to a month ago. That gauge gained two points to end at 22. Raw materials inventories rose at a slightly slower rate than a month ago. The index moved down three points to end at 20.
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.