Tag: Richmond Fed

Manufacturers Cite a Rebound in Activity in Richmond Fed District

The Richmond Federal Reserve Bank said that manufacturing activity in its District rebounded in April after contracting in both February and March. The composite index increased from -7 in March to 7 in April as manufacturers have begun to recover from weather-related weaknesses. The pace of new orders (up from -9 to 10) and shipments (up from -9 to 6) both picked up for the month, helping to lead to the overall index higher. Capacity utilization returned to growth, but just barely (up from -14 to 1), suggesting some stabilization.

With that said, the index for the average workweek was unchanged (2), and employment growth remained weak, but fortunately positive (up from zero to 4).

Looking forward six months, manufacturers in the region remained mostly upbeat about the future, but eased somewhat in April. For instance, the index for expected new orders dropped from 30 to 21. Still, this suggests relatively strong growth in sales over the coming months, with similar optimism for shipments, utilization, hiring, and capital spending. In all, it indicates that manufacturing leaders in the Richmond Fed District are hopeful in their overall outlook despite the slippage in the forward-looking measures in this survey.

Meanwhile, pricing pressures are anticipated to be quite minimal. The prices paid for raw materials edged down from 0.85 percent at the annual rate in March to 0.78 percent in April. Likewise, final goods prices rose just 0.30 percent, down from the 0.32 growth rate the month before. Pricing pressures six months from now also eased, down from 1.81 percent to 1.32 percent.

Chad Moutray is the chief economist, National Association of Manufacturers.

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Monday Economic Report – March 31, 2014

Here is the summary for this week’s Monday Economic Report:

The U.S. economy grew 2.6 percent in the fourth quarter, according to the most recent revision, and for 2013 as a whole, real GDP growth was a rather lackluster 1.9 percent. Consumer spending, business investment and net exports were bright spots in the fourth quarter, with reduced government spending subtracting nearly one percentage point from growth.

Meanwhile, business economists predict real GDP growth of 2.8 percent on average for 2014, with 1.9 percent growth in the current quarter. (My own forecast is marginally higher for both, up 3.0 percent for the year and 2.1 percent for the first quarter of 2014.) Weather-related slowdowns account for the deceleration in activity, particularly for manufacturers, in the current quarter. However, modest growth is expected to resume once temperatures warm up, and we have already begun to see that. The National Association for Business Economics (NABE) Outlook Survey also suggested that the industry should grow 3.2 percent in 2014 and 3.4 percent in 2015, which would indicate a pickup from the current pace.

The latest manufacturing surveys show a rebound in sentiment after softness from December to February. The Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) slowed a bit, down from 57.1 in February to 55.5 in March. Despite the lower figure, new orders and production growth continued to grow relatively strongly, with overall manufacturing activity improved from January’s winter storms. A similar recovery was seen in regional data from the Kansas City Federal Reserve Bank, mirroring the findings from New York and Philadelphia the week before. Still, not everyone has seen improvements yet. The Richmond Federal Reserve reported lackluster growth in sales and output, with weather continuing to “wreak havoc” for many manufacturers. In addition, while new durable goods orders were up a strong 2.2 percent in February, sales growth increased at the less-than-robust rate of just 0.2 percent when transportation orders were excluded.

On the consumer front, the data were mostly positive, but with some caveats. Personal income and spending both increased 0.3 percent in February, with each rising 3.0 percent over the past 12 months. This was a decent pace, but increased purchases of nondurable goods and services mainly fueled spending growth in February. Durable goods spending declined for the third month in a row. In terms of consumer confidence, the two reports out last week were mixed. The Conference Board’s measure of consumer sentiment reached a six-year high; yet, labor market worries dampened enthusiasm for the current environment. Likewise, the University of Michigan and Thomson Reuters reported that consumer sentiment edged lower in March, with employment and income growth also weighing on respondents’ minds. In both surveys, however, Americans are more confident today than in the fall during the government shutdown.

Looking overseas, Markit released preliminary manufacturing PMI data for China and the Eurozone. Chinese manufacturing activity has now contracted for three consecutive months, with March’s pace being the slowest since July. The data mirror other recent indicators, including industrial production, fixed asset investment and retail sales, which have slowed. As such, they all suggest that real GDP might fall below the 7.7 percent rate in the fourth quarter. (First-quarter real GDP for China will be released on April 15.) Meanwhile, European manufacturers have seen expanding activity levels for nine straight months, even as Eurozone PMI values eased slightly in March. New orders and production remain strong in Germany, and, of note, French manufacturers were positive in their sentiment for the first time since June 2011.

This week, the focus will be on the March jobs numbers, which will come out on Friday. The consensus expectation is for nonfarm payroll growth of around 190,000, with manufacturers hiring somewhere near the 12,000 average experienced in the sector since August. In addition, the Institute for Supply Management (ISM) is expected to show a slight rebound in manufacturing PMI activity in its March data, up from 53.2 in February. Other highlights this week include the latest data on construction spending, factory orders and international trade.

Chad Moutray is the chief economist, National Association of Manufacturers.

gdp forecast - mar2014

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Richmond Fed: Manufacturing Activity Contracted Once Again in March

The Richmond Federal Reserve Bank said that manufacturing activity in its District has contracted for two consecutive months. The composite index declined slightly from -6 in February to -7 in March, both of which represent a dramatic shift from the expansion noted in January (12). As such, respondents to the Richmond Fed survey did not observe the rebound from weather-related softness that was noted in similar surveys from the New York and Philadelphia Federal Reserve Banks.

Instead, growth continued to be lackluster, with new orders (unchanged at -9), shipments (down from -6 to -9), and capacity utilization (down from -7 to -14) all declining for the second straight month. Employment levels were flat. According to the Richmond Fed’s report, “A participant commented that weather has `wreaked havoc’ on demand for the past two months, but he anticipated that his company will be very busy once the weather improves.”

Indeed, manufacturers in the region remained mostly upbeat about the future despite the current weaknesses. The index for expected new orders six months from now improved from 15 in February to 30 in March, returning to where it was in January. Similar rises were seen in the forward-looking measures for shipments (up from 17 to 31), capacity utilization (up from 12 to 29), employment (up from 12 to 22), and capital expenditures (up from 9 to 18). The employment figure was notable because it suggested that the pace of hiring was now at its fastest pace since December 2010.

The prices paid for raw materials edged slightly lower for the month, down from 1.19 percent at the annual rate in February to 0.85 percent in March. Pricing pressures six months from now also eased, down from 2.25 percent to 1.81 percent.

Chad Moutray is the chief economist, National Association of Manufacturers.

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Monday Economic Report – March 3, 2014

Here is the summary of this week’s Monday Economic Report:

The U.S. economy grew 2.4 percent in the fourth quarter, down from the earlier estimate of 3.2 percent. Given some of the recent weaker manufacturing, retail and housing data, the downward revision was largely expected. Still, there are some positives in the report, with strength in consumer spending, business investment and net exports. Fixed investment was higher in this revision, which was welcome news. Federal government spending accounted for the biggest drag on growth during the fourth quarter, subtracting one percentage point from the total figure.

The bottom line is that real GDP increased 3.3 percent in the second half of 2013, providing some momentum for growth moving into this year. While weather and other factors have dampened the economy recently (and will also reduce real GDP in the current quarter), we still expect 3.0 percent growth for 2014. Manufacturers continue to be mostly upbeat about demand and production over the coming months.

Despite such optimism in the outlook for the year, the current environment for manufacturers clearly has its challenges. Weather has negatively impacted production and shipments in a number of regions around the country, and surveys from the Dallas, Kansas City and Richmond Federal Reserve Banks all observed some easing in activity in February. This followed similar reports from the New York and Philadelphia Federal Reserve Banks the week before. Meanwhile, the Census Bureau has reported lower new durable goods orders for two straight months, with poor weather conditions likely a factor, particularly for auto sales. At the same time, new durable goods orders excluding transportation were higher, suggesting that the broader manufacturing market was slightly better than the headline figure indicated.

Some of the other data remain mixed. New home sales were up sharply in January to their highest level since July 2008, but year-over-year growth was more modest, and inventories of new homes have fallen over the past few months. Nonetheless, the positive report on new home sales stands in contrast to much weaker residential construction figures of late, including housing starts and existing home sales, which have seen negative impacts from the weather. Similarly, the two major reports about consumer confidence moved in opposite directions, with the Conference Board’s measure lower in February and the University of Michigan’s figure edging slightly higher. Doubts about income and labor growth have possibly fed some anxieties in sentiment in both surveys, but the two reports differ in their findings about the economic outlook.

This week, the focus will be on manufacturing activity, employment growth and international trade. We will get February Purchasing Managers’ Index (PMI) data from the Institute for Supply Management (ISM) later this morning. After falling from 56.5 in December to 51.3 in January, the ISM PMI is expected to increase modestly, still indicating weaknesses in new orders and production for the month. On the trade front, we will be looking for better manufactured goods exports in 2014, improving on the modest 2.4 percent growth rate seen in 2013. Still, manufactured goods exports hit an all-time high last year, providing a positive for economic growth.

The biggest news of the week will come on Friday with the release of new jobs numbers. Nonfarm payroll growth has been soft over the past two months, with just 75,000 and 113,000 net new workers added in December and January, respectively. The consensus expectation is for roughly 165,000 nonfarm workers added in February. In contrast, manufacturing job gains have been fairly decent over the past six months, averaging 15,500 since August, and we should get modest gains again in February. One of the bigger conversation pieces will be whether the unemployment rate falls to 6.5 percent in February, which is the rate specified in the Federal Reserve Board’s forward guidance. (Either way, look for the Federal Open Market Committee to change its guidance at its next meeting.) Other highlights this week include the latest data on construction spending, factory orders, personal income and spending and productivity.

Chad Moutray is the chief economist, National Association of Manufacturers.

personal consumption - mar2014

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Richmond Fed: Weather Reduced Manufacturing Shipments, Sales, Overall Activity in February

The Richmond Federal Reserve Bank said that weather negatively impacted overall manufacturing activity in February in its district. As such, it mirrored contracting levels seen in the Philadelphia Fed survey and easing noted in recent Dallas and New York Fed reports. The Richmond Fed’s composite index fell sharply from 14 in January to -6 in February. This was the lowest level since July, and it averaged 9 over the previous six months (August to January) during a period when the sector was experiencing overall decent growth rates.

The effects of weather can be seen in a number of the February indices, including new orders (down from 14 to -9), shipments (down from 14 to -6), capacity utilization (down from 11 to -7), and the average workweek (down from 8 to -5). Indeed, the Richmond Fed’s release notes that “manufacturing facilities experienced downtime in February, with some reductions in shipments” due to the recent dismal weather conditions. Hiring also slowed to a halt, with its index down from 6 to zero for the month.

Despite these soft figures, manufacturers continued to be mostly upbeat in February, albeit with a deceleration in sentiment from January. The forward-looking index for new orders declined from 30 to 15. This indicates that sales growth is still anticipated to grow over the next six months for most manufacturers in the region, but at a slower pace than predicted the month before. Similar figures were seen for shipments, capacity, the workweek and capital spending. On a positive note, hiring is still expected to grow modestly, with its pace unchanged (12) in February.

Meanwhile, pricing pressures eased for the month but were expected to pick up in the months ahead. Prices paid for raw materials increased 1.19 percent at the annual rate in February, down from 1.53 percent in December and 1.32 percent in January. Yet, over the next six months, raw material costs are anticipated to grow an annualized 2.25 percent, up from 1.64 percent predicted last month.

Chad Moutray is the chief economist, National Association of Manufacturers.

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Monday Economic Report – February 3, 2014

Here is the summary for this week’s Monday Economic Report:

While equity markets around the world continue to worry about the emerging markets, the economic news in the United States has been more encouraging. In particular, we learned that real GDP grew at a relatively strong pace in the fourth quarter, up 3.2 percent. Robust growth in consumer spending and exports boosted the nation’s output, with the main drag being federal government spending. Note that this was the quarter that included the partial government shutdown, which might explain part of that decrease, with defense and nondefense government spending lower. Yet, the key takeaway from this data was the strength of the U.S. economy as we ended 2013, with real GDP increasing 3.7 percent at the annual rate in the second half of the year.

At the same time, it is worth noting that real GDP rose a more-disappointing 1.9 percent for 2013 as a whole, below the 2.8 percent figure seen in 2012. Likewise, personal income growth also decelerated, from 4.2 percent in 2012 to 2.8 percent in 2013. Personal incomes remained flat in general for the month. Nonetheless, total wages and salaries in the manufacturing sector increased from $760.9 billion in November to $763.6 billion in December, with annual growth of 1.9 percent. Meanwhile, personal spending in December rose 0.4 percent, extending the 0.6 percent gain observed in November. While the monthly increase resulted from a huge jump in nondurable goods spending, the annual data reflected larger increases for durable goods (7.1 percent versus 2.1 percent). In other developments, consumer confidence appears to have rebounded after falling during the government shutdown, as reflected in both Conference Board and University of Michigan reports.

Some of the other reports for the manufacturing sector were mixed. Regional sentiment surveys, such as those from the Dallas and Richmond Federal Reserve Banks, continue to show expanding levels of sales and production. Moreover, respondents remain mostly upbeat in their outlook for the next six months. In contrast, new durable goods orders dipped 4.3 percent in December. Moreover, even excluding the highly-volatile transportation sector, new orders would have fallen 1.6 percent, suggesting broader weaknesses beyond aircraft and motor vehicles. Shipments of durable goods were also lower. Weather could have been a factor, as well as the timing of some orders due to the holidays. As such, it will be interesting to see if upcoming data reveals the December data as an outlier.

For its part, the Federal Open Market Committee (FOMC) of the Federal Reserve stressed the positive, noting that “growth in economic activity picked up in recent quarters.” As expected, the FOMC further reduced its purchases of long-term and mortgage-backed securities from $75 billion each month to $65 billion. It had begun to taper these asset purchases at its December meeting. This marked the last meeting chaired by Ben Bernanke, as Janet Yellen became the chair of the Federal Reserve Board on February 1. The FOMC will continue to maintain its “highly accommodative” monetary policies for the foreseeable future, with short-term interest rates remaining effectively zero beyond when the economy reaches 6.5 percent. One notable element in the FOMC statement was that none of the participants dissented this time around. While the committee does have new participants for 2014, this was the first statement to not have a dissention since the June 2011 meeting.

This week, the focus will return to the labor market with the release of January employment numbers on Friday. Following the lackluster nonfarm payroll growth of December, the consensus is for 175,000 net new workers to have been added in January. For manufacturers, we will be looking to see if we can extend the strong hiring gains observed from August to December, adding an average of 16,000 jobs per month during that five-month period. Another highlight will be the December trade data, which will allow us to see if manufacturers were able to improve upon the mostly discouraging export figures that we have seen so far for 2013. Other economic indicators to watch include new data on construction spending, consumer credit, the Institute for Supply Management’s purchasing managers’ index, new factory orders and productivity.

Chad Moutray is the chief economist, National Association of Manufacturers.

annual real gdp growth - feb2014

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Richmond Fed Observed Rising Manufacturing Activity for the Third Straight Month

Manufacturing activity expanded strongly in January, according to the Richmond Federal Reserve Bank, continuing a trend seen since November. In fact, the average composite index over the past three months was 12.7, a nice improvement from the stalled levels of manufacturing growth in the district observed in both September and October.

Despite the better news, the underlying subcomponents were mixed, with a slower pace of growth for some measures. On the positive side, new orders (up from 10 to 14), capacity utilization (up from 8 to 11), and the average workweek (up from 6 to 8) were all higher. In contrast, shipments (down from 15 to 14) and the number of employees (down from 14 to 6). Nonetheless, each of these figures suggest continued expansion overall.

Along those lines, manufacturers in the Richmond Fed district remain mostly upbeat about the next six months — a finding consistent with other regional surveys. Respondents were generally optimistic about sales, shipments, utilization, and capital spending for the first half of 2014. Hiring was also expected to grow, but less robustly than the other figures.

In terms of pricing pressures, manufacturers continue to experience the benefits of decelerated raw material costs. The average price paid for inputs was down for 1.97 percent at the annual rate in November to 1.53 percent in December to 1.32 percent in January. Those taking the survey anticipate inflation to pick up only modestly, increasing to 1.64 percent by mid-year, according to the survey. That represents a decrease from the 2.05 percent expected last month.

Chad Moutray is the chief economist, National Association of Manufacturers.

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Monday Economic Report – January 6, 2014

Here is the summary for this week’s Monday Economic Report:

The incoming data show that manufacturers ended 2013 on a high note. Despite a slight decline in December, the Institute for Supply Management’s (ISM) Purchasing Managers’ Index (PMI) has reflected expanding manufacturing activity for seven consecutive months. Moreover, the manufacturing PMI data averaged 56.3 in the second half of 2013, a nice improvement from the 51.5 average during the first half of the year. As such, it appears that manufacturing activity has rebounded in the past few months from notable weaknesses in the spring, helping to buoy the prospects for continued growth in 2014. For instance, the real strength in the ISM report has been the new orders and production indices, both of which have exceeded 60.0—signifying healthy gains—for at least five straight months.

In a report released after Christmas, the Census Bureau reported that new durable goods orders increased 3.5 percent in November (or 1.2 percent, if you exclude the highly volatile transportation sector). From November 2012 to November 2013, sales of durable goods products rose at a strong 10.9 percent pace, and they are at their second-highest level since the end of 2007. Such findings are encouraging. At the same time, manufacturers in the Dallas and Richmond Federal Reserve Bank districts remain mostly upbeat about future activity for the sector. This was true even with some easing in new orders in both regions. More than half of the respondents to the Texas Manufacturing Outlook Survey expect increased new orders in the next six months.

Manufacturing construction spending rose 1.2 percent from $53.93 billion in October at the annual rate to $54.58 billion in November. This was the fifth straight month that construction spending has risen for the sector, increasing from $43.34 billion in June, the lowest point of the year. Over a longer time horizon, manufacturers have steadily upped their construction investment dollars after bottoming out in January 2011 at an annualized $28.84 billion pace. Overall construction activity increased 5.9 percent on a year-over-year basis, boosted significantly by the rebounding housing market. Private, residential construction activity has grown 16.6 percent since November 2012. Private, nonresidential construction spending has been stable, rising a more modest 1.0 percent year-over-year. However, nonresidential construction in the private sector has risen five months in a row, up 8.5 percent in that time frame.

Similarly, we have seen consumer confidence rebound in the latest data after falling during the federal government shutdown. Reports from both the Conference Board and the University of Michigan observed rising sentiment in December. The Conference Board’s Consumer Confidence Index increased from 72.0 in November to 78.1 in December. While this remains below the recent peak of 82.1 in June (its highest point since January 2008), it is clear that Americans have become more optimistic over the course of 2013, with the index measuring 58.4 in January. Even with these gains, consumers remain somewhat anxious about the economy, particularly with their income and job potential. The Conference Board’s key measure has not exceeded 100 since August 2007.

The Conference Board report does suggest an increased willingness to purchase homes and appliances, with automobile buying intentions improved from the summer. Similarly, personal spending growth has also made gains in the past few months, up 0.4 percent in October and 0.5 percent in November. Much of that growth stemmed from an increase in durable goods expenditures. Consumer spending has increased 3.5 percent over the past 12 months, its fastest pace of 2013 and an improvement from the 2.9 percent year-over-year rate in September.

This week, the primary focus will be the employment report due out on Friday. The consensus estimate is for roughly 200,000 nonfarm payroll jobs added in December, which would be in line with the 204,000 average per month from August to November. Likewise, manufacturers added an average of 16,500 net new workers each month over the same time frame, and they are expected to have continued to make modest hiring gains in December. The other key highlight this week will be new international trade data, which will be released tomorrow. Recent data have suggested a narrowing of the overall trade deficit, and yet, growth in manufactured goods exports has been quite slow. We hope improvements in the global economy will help to increase manufacturers’ overseas sales moving forward.

Chad Moutray is the chief economist, National Association of Manufacturers.

ism pmi - jan2014

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Monday Economic Report – December 2, 2013

Here is the summary for this week’s Monday Economic Report:

The data released last week were mostly positive regarding improvements in the economy. For instance, manufacturing activity has largely picked up since the summer, an acceleration that is welcome after softness over the past year or so. Reports from the Chicago, Dallas and Richmond Federal Reserve Banks support this, with stronger paces for new orders and production in each region. This is especially true when you look at the mostly positive assessments of future sales and output, with large percentages of survey respondents anticipating rising activity levels. The good news extends to better—although still modest at best—hiring plans. The pickup in the manufacturing sector has also been one of the positive factors helping the Conference Board’s Leading Economic Index (LEI) expand for four straight months, an encouraging sign for the economy for the coming months.

Yet, even among these promising reports, there were signs of continuing softness for the sector. In the Dallas Federal Reserve survey, respondents were more upbeat about their own company’s outlook than they were about the larger macroeconomy. In fact, the index for perceptions about the economy as a whole declined from 3.6 to 1.9, with 65.0 percent of respondents not expecting macroeconomic conditions to improve over the next six months. In addition, the data on new durable goods orders found broad-based softness in the sector in contrast to the various sentiment surveys. Declines in October sales went beyond the decrease in aircraft orders. Moreover, while new durable goods orders have risen 5.3 percent since October 2012, year-to-date growth in durable goods orders—excluding the highly volatile transportation sector—has increased just 0.9 percent.

Similarly, the latest housing market data were also somewhat mixed. New housing permits in October soared to more than 1 million annualized units for the first time since April. To the extent that permits serve as a proxy for future residential construction activity, this was an encouraging development. Yet, the ascent in the permitting data came entirely from multifamily units, with single-family home permits essentially stalled. Higher mortgage rates have been a factor in dampening current demand for new construction; however, the average 30-year mortgage rate of 4.29 percent last week was better than early September’s 4.57 percent. Meanwhile, new housing starts data were delayed until the December 18 release due to the government shutdown, somewhat hampering our ability to analyze the housing market beyond permits.

By now, the holiday shopping season is in high gear. We will need to wait for final numbers on whether retail spending increased over last year, although the National Retail Federation reported mixed results despite deep discounting over the Thanksgiving holiday weekend. We also need to closely look at consumer confidence, particularly in determining how willing Americans will be to open their wallets. The two measures of consumer sentiment released last week moved in opposite directions, providing a bit of confusion regarding current attitudes. The Conference Board’s consumer confidence data fell again in November, with respondents suggesting reduced buying intentions. October’s budget impasse was not helpful, but overall sentiment has been lower since June. In contrast, the University of Michigan and Thomson Reuters surprised many with a better-than-expected final reading of its consumer sentiment index, improving from the preliminary report released just two weeks prior. Despite the recent gain, however, this report remains below the six-year high achieved in the summer.

This week will be a very busy one on the economic front. Later this morning, we will learn more about the strength of the pickup in manufacturing activity in the Institute for Supply Management’s Purchasing Managers’ Index, and on Wednesday, new international trade figures will show whether improving economies in many of our major trading partners will increase our exports. In addition, the bigger headlines will come on Thursday and Friday with a revision to third-quarter real GDP and the jobs report for November. Other highlights will be the Federal Reserve’s Beige Book and new releases on construction spending, factory orders, personal income and vehicle sales.

Chad Moutray is the chief economist, National Association of Manufacturers.

midwest manufacturing index - dec2013

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Richmond Fed: Manufacturing Activity Picked Up Strongly in November

The Richmond Federal Reserve Bank said that manufacturing activity picked up strongly in November, rebounding from stalling out in September and October. The composite index increased significantly from 0 in September and 1 in October to 13 in November. That brought the measure closer to the 14 observed in August. In general, the Richmond data have mirrored other regional surveys, with an improvement seen more recently after softness earlier in the year. With that said, fiscal uncertainties and the government shutdown were not helpful to manufacturers in the District.

In November, the data were higher across-the-board. For instance, the index of new orders increased from 0 in October to 15 in November, with similar findings for shipments (up from -2 to 16) and the average workweek (up from -1 to 12). Hiring was up only modestly (up from 4 to 6), but that was still better than the net decline in September. Still, capacity utilization did not change, albeit with progress from the month before (up from -5 to 0).

Moving forward, manufacturers in the Richmond Fed’s region remained mostly upbeat, with some gains in sentiment in November. The index of expected new orders six months from now rose from 23 in October to 33 in November, suggesting cautious optimism for stronger future sales. Similar progress is anticipated for forthcoming shipments (up from 30 to 37) and capacity utilization (up from 18 to 20). Moreover, firms expect to continue investing in their businesses in light of improvements in activity, with hiring and capital spending picking up from the current pace.

The prices paid for raw materials increased 1.97 percent at the annual rate in November, down from 2.44 percent in September and 2.27 percent in October. This indicates a continuing deceleration in pricing pressures. The forward-looking expectations for inflation were also lower, down from 2.26 percent in September to 2.08 percent in October to 1.75 percent in November.

Chad Moutray is the chief economist, National Association of Manufacturers.

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


A Manufacturing Blog

  • Categories

  • Connect With Manufacturers

            
  • Blogroll