Richmond Fed manufacturing index -3 versus 12 estimate

Author: Greg Michalowski | Category: Central Banks

Richmond Fed manufacturing index for September 2020

Richmond Fed

  • Prior report came in at 9. That was much lower than the 25 estimate at the time.
  • Manufacturing index comes in weaker than expected at -3 versus 12 estimate. 
  • Shipments -1 versus six last month. 
  • New orders -19 versus five last month.
  • Number of employees 20 versus 18 last month .
  • Wages 41 versus 50 last month.
  • Average workweek three versus 11 last month.
  • Availability of skills needed -23 versus -36 last month .
  • Prices paid 14.01 versus 11.05 last month .
  • Prices received 9.13 versus 9.25 last month
  • Backlog of orders 12 versus nine last month.
  • Capacity utilization -5 versus six last month.
  • Vendor lead times 59 versus 61 last month.
  • Local business conditions -8 versus -12 last month.
  • Capital expenditures 10 versus 16 last month
  • Finished goods inventories -14 versus  -10 last month
  • Raw materials inventories -19 versus -14 last month.
  • Equipment and software spending 22 versus 16 last month.
  • Services expenditures six versus three last month.

Other regional indices have so far come in a little better than expected for September. This report is not consistent with those readings.
  • Empire manufacturing index 34.3 versus 18.0 estimate
  • Philadelphia Fed manufacturing business outlook survey rose to 30.7 in September vs 18.8 estimate.
Highlights:
  • The indexes for shipments and new orders fell below 0 for the first time since May 2020, but the third component index-employment- remained positive. 
  • Manufacturers continued to see low inventories and lengthening lead times and backlogs of orders
  • Firms reported weakening local business conditions, but they were optimistic that conditions would improve in the next six months.  
  • Finding workers with the necessary skills remained a challenge
  • The average growth rate of prices paid by survey respondents increased in September, while that of prices received declined. 
  • Participants expected growth of both prices paid and prices received to slow in the next year
Below is a look at the expectations indices for the major component sectors
Richmond Fed expectations indices Overall, the report is a disappointment with the index moving back into the negative
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