Richmond Fed Manufacturing: Sharp Decline In April

Fifth District manufacturing activity changed declined sharply in April, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite index dropped to -53 in April from 2 in March. Because of the highly volatile nature of this index, we include a 3-month moving average to facilitate the identification of trends is now at -17.7, which indicates contraction. The complete data series behind today's Richmond Fed manufacturing report, which dates from November 1993, is available here.

Here is a snapshot of the complete Richmond Fed Manufacturing Composite series.

Here is the latest Richmond Fed manufacturing overview.

Fifth District manufacturing activity declined sharply in April, according to the most recent survey from the Richmond Fed. The composite index plummeted from 2 in March to −53 in April, its lowest reading and largest one-month drop on record. All three components—shipments, new orders, and employment—fell, and the indexes for shipments and new orders reached record lows. Firms reported weakened local business conditions and expected conditions to remain soft in the next six months.

Survey results reflected a deterioration in employment conditions in April. More contacts reported drops in employment and average work week, although the wage index remained flat. Manufacturers expected these conditions to persist. On balance, employers still struggled to find workers with the necessary skills, but expected this constraint to ease in the coming months—the expectation index for availability of skills was above zero for the first time since 2017.

The average growth rate of prices paid by survey respondents rose in April, while that of prices received fell, widening the gap between the two. Manufacturers expected the growth rates of both to increase in the next several months. Link to Report

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 ISM Manufacturing survey is released (below).

Let's compare all five Regional Manufacturing indicators. Here is a three-month moving average overlay of each since 2001 (for those with data).

Here is the same chart including the average of the five.