US: Richmond Fed Manufacturing Index

Tue Mar 27 09:00:00 CDT 2018

Consensus Consensus Range Actual Previous
Level 22 15 to 28 15 28

Manufacturing activity growth in the Fifth District slowed more than analysts expected in March, with the Richmond Fed Manufacturing Index falling sharply by 13 points from February's near record level to 15. The deceleration seen in the seventeenth consecutive monthly expansion of manufacturing in the Fifth District followed February's particularly dynamic upsurge and was driven by sizeable declines in shipments, down 16 points to 15, new orders, down 10 points to 17 and employment, where the number of employees component fell 14 points to 11. But the deceleration was broad-based, with all but one (service expenditures, up 8 points to 18) of the business sector activity components registering declines within current conditions.

Market Consensus Before Announcement
Easing acceleration is Econoday's consensus for the Richmond Fed manufacturing index, at a consensus 22 for March vs February's near record at 28. Capacity stress in this sample is a question given February's rise in capacity utilization together with sizable pressures for input costs and selling prices.

This survey tracks business conditions in the Richmond Fed's manufacturing sector. The headline index is a composite of the new orders, shipments, and employment indexes.

Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. By tracking economic data such as the regional Fed surveys, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more moderate growth so that it won't lead to inflation. These surveys give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since manufacturing is a major sector of the economy, this report has a big influence on market behavior.