The Richmond Fed’s Manufacturing Composite Index returned to expansionary territory in February at 16 after two months of contraction. The increase reflected resurgent new orders and shipments while employment continued about on trend. The rebound was well above market expectations and sounds an encouraging note for the factory sector overall.
The Whetstone Analysis calculation for a six-months expectation based on the same components as the Composite Index showed a mild recovery in the outlook for the region’s factory sector, but at a slower pace than in recent years.
Prices paid were down for a fourth month in a row on moderation in energy costs, although the decrease were smaller. Prices received showed some pricing power remains on the part of businesses.
The Richmond-ISM equivalent index pointed to the possibility of a rise in the ISM Manufacturing Index in February. The Richmond measure has a strong correlation with the ISM index and was up a solid 5.7 points to 56.4 in February. However, it comes on the heels of two month’s of soft readings and probably overstates its relevance to the national index.
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