Courtesy of Doug Short.
As a resident of the Fifth District, this is a regional manufacturing index I pay close attention to. The Fifth District includes Virginia, Maryland, the Carolinas, the District of Columbia and most of West Virginia. The Federal Reserve Bank of Richmond is the region’s connection to the nation’s Central Bank.
The complete data series behind the latest Richmond Fed manufacturing report (available here) dates from November 1993. The chart below illustrates the 21st century behavior of the diffusion index that summarizes the individual components.
The April update shows the manufacturing composite at 7, a major bounce from last month’s -7. Today’s composite number was above the Investing.com forecast of 0.
Because of the highly volatile nature of this index, I like to include a 3-month moving average, now at -2.0, to facilitate the identification of trends.
Here is a snapshot of the complete Richmond Fed Manufacturing Composite series.
Here is the latest Richmond Fed manufacturing overview.
| Fifth District manufacturing activity improved in April, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders increased. Employment rose, while wages advanced at a slower rate. The average workweek was unchanged from a month ago.
Manufacturers looked for stronger business conditions during the next six months, although expectations were below last month’s outlook. Compared to last month’s outlook, survey participants anticipated somewhat slower growth in shipments, new orders, and capacity utilization. Manufacturers also looked for slower growth in employment and wages. In addition, expectations were for little change in the average workweek. They predicted vendor lead times would edge up at about the same pace as March’s outlook. Current prices of raw materials and finished goods rose at a slower pace in April compared to last month. Manufacturers expected faster growth in prices paid and prices received over the next six months, although their outlook was below last month’s predictions. |
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 Manufacturing ISM Report on Business is released on April 1st.
Because of the high volatility of this series, we should take the data for any individual month with the proverbial grain of salt.
