June 2019 Richmond Fed Manufacturing Survey Growth Weak

Of the four regional Federal Reserve manufacturing surveys released to date, three are in expansion.

Market expectations from Econoday were 3 to 5 (consensus 4). The actual survey value was 3 [note that values above zero represent expansion].

Fifth District manufacturing activity changed little in June, according to the most recent survey from the Richmond Fed. The composite index dropped slightly from 5 in May to 3 in June, resulting from a drop in the employment index, while the other two components, shipments and new orders rose slightly. Most firms reported some improvement in local business conditions, and they were optimistic that they would see growth in the next six months.

Survey results suggested that the employment and average workweek indexes were fairly flat in June. Meanwhile, wage growth reportedly continued and firms still struggled to find workers with the necessary skills. Respondents expected this struggle to continue, but anticipated growth in employment and wages in the coming months.

The growth rate of prices paid fell in June, while the growth rate of prices received increased, causing prices received to outpace prices paid for the first time since May 2017. Firms expected to see continued growth in both prices paid and prices received in the near future.

Richmond Fed (hyperlink to reports):

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Summary of all Federal Reserve Districts Manufacturing:

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):

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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 (red bar) to the Richmond Fed survey (darkest bar).

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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