Tuesday, August 24, 2010

Stat of the Day: Richmond Manufacturing Stronger Then Expected

The market continues to roll over because of weak existing home sales even though the Richmond Fed Manufacturing report came in better then expected and still showing strong growth. After the Philly Fed reported a significant drop last week to -7 everybody was expecting the worse from this report.

Richmond reported a drop to +11 for August up down from the +16 reported for July. So the report weakened but its still signaling strong growth in the 5th District.Orders, Capacity Utilization, and Average Workweek remained strong while Backlog Orders flat lined though similar to the last 2 months. 

Again a very solid report in an environment where the markets have priced in a double dip recession. The data outside of housing continues to not support such a scenario. Summary data from the Richmond report.

Overview

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.

Current Activity

In August, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — declined five points to 11 from July's reading of 16. Among the index's components, shipments declined 11 points to 11, new orders slipped three points to finish at 10, and the jobs index eased three points to 12.
Other indicators varied. The backlogs of orders measure flattened, and the index for capacity utilization was virtually unchanged at 14. The delivery times index picked up four points to end at 8. Our gauges for inventories were mixed in August. The finished goods inventory index edged up three points to 11, and the raw materials inventory index trimmed two points to finish at 9.


No comments: