Richmond Fed Manufacturing Activity Deteriorated in May
This article was originally written by Jill Mislinski. Starting in January 2023, AP Charts pages will be maintained by Jennifer Nash at Advisor Perspectives/VettaFi.
Fifth district manufacturing deteriorated in May, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index is at -15 in May, down 5 from April. This month's reading is worse than the Investing.com forecast of -8 and is the fifth consecutive month the index has reported worsening conditions.
Here is an excerpt from the latest Richmond Fed manufacturing overview:
Fifth District manufacturing firms reported deterioration in business conditions in May, according to the most recent survey from the
Federal Reserve Bank of Richmond. The composite manufacturing index fell from -10 in April to -15 in May. Two of its three component indexes—shipments and new orders—declined. The shipments index dropped from -7 in April to -13 in May, while the new orders index fell from -20 to -29. The employment index, however, rose slightly from 0 in April to 5 in May. Link to Report
Background on Richmond Fed Manufacturing
The complete data series behind today's Richmond Fed manufacturing report, which dates from November 1993, is available here. The Richmond Manufacturing Index is a gauge of manufacturing activity in the Fifth Federal Reserve District (Maryland, North Carolina, the District of Columbia, Virginia, most of West Virginia, and South Carolina) compiled from a survey of ~100 manufacturers. The composite manufacturing index is an average of indexes on shipments, new orders, order backlogs, capacity utilization, supplier lead times, number of employees, average work weak, wages, inventories, and capital expenditures. This is a diffusion index, meaning negative readings indicate contraction and worsening conditions, while positive ones indicate expansion and improving conditions. The survey offers clues on inflationary pressures and the pace of growth in the manufacturing sector for this region of the country and the accumulated results can help trace long-term trends.