September 2020 Richmond Fed Manufacturing Survey Improvement Continues

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

Market expectations from Econoday were +10 to +16 (consensus +12). The actual survey value was 21 [note that values above zero represent expansion].

Manufacturing activity in the Fifth District improved in September, according to the most recent survey from the Richmond Fed. The composite index climbed from 18 in August to 21 in September, buoyed by increases in the indicators for new orders and employment. The third component index — shipments — decreased but remained positive, suggesting continued expansion. Survey results also reflected improvement in local business conditions and increased capital spending. Overall, respondents were optimistic that conditions would continue to improve in the next six months.

Results reflected higher employment among many survey participants in September and suggested several manufacturers raised wages over the month. Firms struggled to find workers with the necessary skills. Respondents expected to see a continued rise in employment and wages.

The average growth rate of prices paid by surveyed manufacturers rose in September, while that of prices received fell, widening the gap between the two. On average, firms expected growth rates of both prices paid and prices received to rise 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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