Richmond Fed Manufacturing: Slight Increase in September, But Still Negative

Today the Richmond Fed Manufacturing Composite Index increased 2 points to -8 from last month's -11. Investing.com had forecast -2. Because of the highly volatile nature of this index, we include a 3-month moving average to facilitate the identification of trends, now at -3.0, indicates contraction. 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.

Richmond Fed Manufacturing

Here is the latest Richmond Fed manufacturing overview.

Manufacturing activity in the Fifth District continued to soften in September, but somewhat less so than in August, according to the Richmond Fed's latest survey. New orders and shipments decreased this month at a slower pace, while backlogs decreased at about the same pace as last month. Hiring activity weakened across firms and wage increases were less widespread. Although raw materials prices rose at a somewhat faster pace in September, prices of finished goods barely increased in the month.

Looking ahead six months, producers' expectations about future business conditions have softened compared to last month's readings. Manufacturers expected softer growth in shipments and in the volume of new orders as well as backlogs of orders. Fewer survey participants expected vendor lead times to lengthen. Expectations for increased capacity utilization softened somewhat.

Manufacturing firms anticipate more modest hiring and continued wage increases in the months ahead. Firms expected faster growth in prices received and prices paid in the next six months. Link to Report

Here is a somewhat closer look at the index since the turn of the century.

since 2000

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