August 2021 Richmond Fed Manufacturing Survey Significantly Declined

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

Market expectations from Econoday were 20 to 27 (consensus 25). The actual survey value was 9 [note that values above zero represent expansion].

Fifth District manufacturing activity improved in August, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite index declined from 27 in July to 9 in August but remained in expansionary territory, as all three component indexes — shipments, new orders, and employment — decreased but remained positive. However, several manufacturers reported deteriorating local business conditions. Survey contacts also noted that lead times continued to increase and inventories remained low. Overall, they were optimistic that conditions would improve in the next six months.

Survey results suggested that many firms increased employment and wages in August, as the wage index hit a record high. Firms struggled to find workers with the necessary skills, and they expected these trends to continue in the coming months.

The average growth rate of prices paid by survey respondents declined slightly in August, while that of prices received increased. Firms expect price growth to slow over the next year.

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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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