Of the four regional Federal Reserve surveys released to date, three are in contraction and one is in expansion.
No market expectations were released by Bloomberg this month. The actual survey value was +2 [note that values above zero represent expansion].
Fifth District manufacturing activity grew mildly in January, according to the most recent survey by the Federal Reserve Bank of Richmond. The volume of new orders grew modestly this month, although shipments decreased. Hiring increased at a slightly slower pace compared to last month, although average wages continued to increase at a moderate pace in January, and the average workweek lengthened. Raw materials prices rose at a somewhat slower pace, while prices of finished goods rose at a faster pace than in December.
Manufacturers were more optimistic about future business conditions than they were a month ago. Survey participants expected faster growth in shipments and in new orders. Additionally, producers looked for increased capacity utilization and anticipated rising backlogs. Expectations were for longer vendor lead times.
Survey participants planned more hiring, along with robust growth in wages and a pickup in the average workweek during the next six months. Firms looked for faster growth in prices paid and prices received over the next six months, although their outlook was below December’s expectations.
Current Activity
Overall, manufacturing activity grew mildly in January, but the growth was slower compared to a month earlier. The composite index lost four points, softening to a nearly flat reading of 2. New orders grew modestly in January, although the index slipped four points from a month earlier to end at 4. In addition, the index for shipments decreased to a reading of −6. Hiring moderated this month. At an index of 9, the indicator finished three points lower compared to last month.
Backlogs of new orders grew modestly in January, the index gained four points to end at 4, however capacity utilization slowed to a flat reading of 0. Vendor lead time lengthened only slightly this month with the index adding one point to end at 4. Finished goods inventories and raw materials inventories rose at a moderate pace, the indicators finished at 24 and 21 respectively, little changed from the month ago readings of 27 and 23.
Read entire source document from Richmond Fed
Summary of all Federal Reserve Districts Manufacturing:
Richmond Fed (hyperlink to reports):
z richmond_man.PNG
Kansas Fed (hyperlink to reports):
z kansas_man.PNG
Dallas Fed (hyperlink to reports):
z dallas_man.PNG
Philly Fed (hyperlink to reports):
z philly fed1.PNG
New York Fed (hyperlink to reports):
z empire1.PNG
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 (darkest bar).
Comparing Surveys to Hard Data:
z survey1.png
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.
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