Richard Feda’s Index of Manufacturing Activity

  • Previous month -7 revised to -8
  • Richmond Fed Composite Manufacturing Index -9 vs -8 in June
  • Shipments index -6 versus -5 in June
  • Service Revenue Index -2 vs. -8 and June
  • employment 5 compared to -1 last month
  • wages 19 versus 17 last month
  • prices paid 4.07 against 4.56 last month
  • prices reached 4.01 compared to 4.56 last month

The Federal Reserve Bank of Richmond said manufacturing activity in the Fifth District remained weak in July. The composite index of the manufacturing industry fell slightly from -8 in June to -9 in July. Two key components of the index – deliveries and new orders – also fell. Specifically, the shipments index rose from -5 in June to -6 in July, and the new orders index fell from -16 to -20.

However, the employment index rose from -1 in June to 5 in July, indicating an improvement in the sector. Despite this, the overall index of business conditions remained negative at -9 in July, reflecting continued pessimism among firms.

Many companies reported reductions in order backlogs and supplier lead times, with indices for both remaining negative. Meanwhile, two of the three spending indexes posted smaller gains.

The report also highlighted that the average growth rate of prices paid and received fell slightly in July. Firms expect these growth rates to moderate over the next 12 months. Despite some positive indicators, the general outlook remains cautious.

Below is the Richmond Fed survey chart including current conditions and expectations for the six-month forward.

Interesting are the price trends that are falling back to pre-pandemic levels:

Richmond Fed rates trend down

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