Of the four Federal Reserve districts which have released their November manufacturing surveys – two are in expansion and two are in contraction.
Analyst Opinion of Dallas Fed Manufacturing Survey
Important subindices new orders modestly improved (but in contraction) and unfilled orders improving and remaining in contraction. The survey is at the lowest level seen in over 3 years. This should be considered a similar report relative to last month.
The expectations from Econoday were -8.0 to -1.0 (consensus -2.5) for the general activity index and the reported value was -2.4. From the Dallas Fed:
Texas factory activity contracted slightly in November, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, dipped into negative territory for the first time since mid-2016, falling seven points to -2.4.
Other measures of manufacturing activity were also negative in November, suggesting declines. The new orders index remained negative for a second month in a row, coming in at -3.0. The growth rate of orders index pushed further into negative territory, falling from -5.9 to -9.3. The capacity utilization and shipments indexes turned negative after three years in positive territory, falling to -5.3 and -4.5, respectively.
Perceptions of broader business conditions worsened slightly in November. The general business activity index remained negative but moved up from -5.1 to -1.3. The company outlook index fell 11 points to -2.1. Both indexes have oscillated between positive (expansionary) and negative (contractionary) territory this year, with the latest barely-negative readings suggesting modest contraction. The index measuring uncertainty regarding companies’ outlooks moved up to 17.1, a reading well above average.
Labor market measures suggested stable employment levels and shorter workweeks this month. The employment index retreated from 11.0 to 0.9, with the near-zero reading suggesting little to no job growth on balance. Eighteen percent of firms noted net hiring, while 17 percent noted net layoffs. The hours worked index dipped from 4.7 to -4.3.
Prices and wages continued to rise in November, although growth in selling prices was quite muted. Upward pressure on raw materials eased somewhat, with the index declining five points to 17.8. The finished goods prices index retreated to 1.9, with the vast majority of manufacturers noting no change in selling prices from October. The wages and benefits index held steady at 21.1.
Expectations regarding future business conditions remained optimistic in November. The index of future general business activity rose five points to 7.3, while the index of future company outlook edged up to 17.0. Other indexes for future manufacturing showed mixed movements but remained solidly in positive territory.
Dallas Fed (hyperlink to reports):
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Source: Dallas 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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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 (red bar) to the Dallas Fed survey (light blue 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.
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