March 2020 Richmond Fed Manufacturing Survey Insignificantly Improves

Of the three regional Federal Reserve manufacturing surveys released to date, two were in contraction and one barely in expansion.

Market expectations from Econoday were -16 to -4 (consensus -10). The actual survey value was 2 [note that values above zero represent expansion].

Fifth District manufacturing activity remained fairly flat in March, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite index remained close to 0, rising from −2 in February to 2 in March. The indexes for shipments and new orders were above their February values, but the third component — employment — decreased. Manufacturers reported weakening local business conditions and a decrease in backlog of orders. Survey respondents were pessimistic, expecting weaker business conditions and a drop in shipments and new orders in the coming months.

Survey results suggested a drop in employment but continued growth in wages in recent weeks. Employers continued to struggle to find workers with the necessary skills and expected this difficulty to persist in the next six months.

Manufacturers reported a drop in the growth rates of both prices paid and prices received, with growth of prices paid slightly outpacing that of prices received. Growth rates of both prices paid and prices received were expected to increase 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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