The Richmond Federal Reserve Bank reported that manufacturing activity was much-improved, with the composite index up from 3 in December to 12 in January. This is the highest level since April, and a sign that the region is entering the new year on a stronger footing. As with other regions (especially on the East coast), this reflects a turnaround from the contractions experienced from July to October.
Looking at its various components, the rate of growth for new orders rose. The index grew from 7 to 14 for the month. A similar trend was observed for shipments and capital expenditure plans. Also, after contracting last month, manufacturing in the Richmond region plan to start hiring again, with the index going from -4 to 4.
Moreover, the prospects for growth are positive for 2012, with high levels of optimism across the board. In that respect, it mirrors other comparable surveys which show both a rebound in activity and positive prospects for the new year.
Chad Moutray is chief economist, National Association of Manufacturers.