Richmond Fed: Manufacturing Slows In May
Doug Short | May 25, 2016 12:29AM ET
Today the Richmond Fed Manufacturing Composite Index fell 15 points to -1 from last month's 14. Investing.com had forecast 9.0. Because of the highly volatile nature of this index, we include a 3-month moving average to facilitate the identification of trends, now at 11.7, indicating expansion. The complete data series behind today's Richmond Fed manufacturing report (available here ), which dates from November 1993.
Here is a snapshot of the complete Richmond Fed Manufacturing Composite series.
Here is the latest Richmond Fed manufacturing overview.
Fifth District manufacturing activity slowed in May, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and backlogs decreased, and order backlogs flattened this month. Manufacturing hiring rose modestly, while average wages continued to increase at a moderate pace. Prices of raw materials and finished goods rose more quickly in May, compared to last month.
Despite the soft current conditions, firms remained optimistic about future business conditions. Expectations in May were little changed from April readings. Firms expect moderate growth in shipments and in the volume of new orders in the six months ahead. In addition, manufacturers looked for rising backlogs of new orders. Producers anticipated a decline in capacity utilization and unchanged vendor lead times in the next six months.
Survey participants looked for modest growth in hiring during the next six months. Wage increases were expected to continue to be widespread. Producers anticipated little change in the average workweek. Looking ahead, manufacturers expected faster growth in prices paid and received. Link to Report
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Here is a somewhat closer look at the index since the turn of the century.
Is today's Richmond composite a clue of what to expect in the next PMI composite? We'll find out when the next ISM Manufacturing survey is released (below).
Because of the high volatility of this series, we should take the data for any individual month with the proverbial grain of salt.
Let's compare all five Regional Manufacturing indicators. Here is a three-month moving average overlay of each since 2001 (for those with data).
Here is the same chart including the average of the five.
Here are the remaining four monthly manufacturing indicators that we track:
Texas Manufacturing Outlook Survey (TMOS)
Kansas City Manufacturing Survey
Empire State Manufacturing Survey
Philadelphia Fed Manufacturing Business Outlook Survey
Regional Fed Overview
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