Tuesday, August 24, 2010

Richmond Fed: Manufacturing Growth Continued to Ease in August

by Bill McBride on 8/24/2010 01:33:00 PM

Note: Usually I don't post all the regional manufacturing surveys, however with the inventory adjustment over, export growth slowing, and domestic consumer demand sluggish, these surveys provide an early look at weakness in the manufacturing sector.

From the Richmond Fed: Manufacturing Growth Continued to Ease in August; Expectations Drifted Lower

Manufacturing activity in the central Atlantic region advanced for the seventh consecutive month in August, but at a more modest pace than a month earlier, according to the Richmond Fed's latest survey. All broad indicators — shipments, new orders and employment — continued to grow but at a rate below July's pace. Other indicators were mixed, however. Capacity utilization grew nearly on par with last month, while growth in backlogs flatlined. Vendor delivery times grew at a slightly quicker rate and manufacturers reported somewhat faster growth in finished goods inventories.

Looking ahead, assessments of business prospects for the next six months were less optimistic in August. Survey contacts anticipated slower growth in shipments, new orders, capacity utilization, and capital expenditures and expected declines in backlogs and vendor lead time.
This is similar to the NY Fed and Philly Fed surveys - although the Philly Fed showed contraction in August. Growth in the manufacturing sector is clearly slowing.