January 2020 Richmond Fed Manufacturing Survey Significantly Improves

Of the five regional Federal Reserve manufacturing surveys released to date, four were in expansion and one in contraction

Market expectations from Econoday were -2 to +9 (consensus +5). The actual survey value was 20 [note that values above zero represent expansion].

Fifth District manufacturing activity rebounded in January, according to the most recent survey from the Richmond Fed. The composite index rose from −5 in December to 20 in January, as all three components — shipments, new orders, and employment — increased. Local business conditions also improved as this index saw its largest increase since February 2013. Manufacturers were optimistic that conditions would continue to strengthen in the coming months.

Survey results indicate that both employment and wages rose for survey participants in January. However, firms continued to struggle to find workers with the necessary skills. They expected this difficulty to persist but wages and employment to continue to grow in the next six months.

The average growth rates of both price paid and prices received by survey respondents fell in January. Growth of prices received outpaced that of prices paid, but firms expect the growth rate of prices paid to rise and that of prices received to fall in the near future.

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Richmond Fed (hyperlink to reports):

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Summary of all Federal Reserve Districts Manufacturing:

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 (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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