Richmond Fed Manufacturing Survey Shows Gain

The Richmond Fed said Tuesday that manufacturing in the central Atlantic area increased in February for the third consecutive month in yet another example of a broad resurgence in U.S. factory activity.

The Richmond survey's composite index, the broadest measure of manufacturing in the region, posted an eight point growth in activity to 20. The survey's forward-looking new orders component jumped seven points to 21, after an increasing to 14 points in January. The region has seen a steady upswing since a contraction of two points in November.

Broad indicators all grew, with shipments gaining eight points to 25 and the jobs index up nine points to 13.

Other indicators took a positive swing, with capacity utilization growing four points to 12, the backlog index climbing eight from minus four to positive four and the delivery times index rising 11 points to 14.

The labor market also strengthened, with manufacturing employment climbing nine points to end at 13, while the average workweek index went up six points to 10, while wage growth fell three points to seven.

The prices of raw materials rose at an annual rate of 2.25 percent in February, while finished goods rose 0.97 percent.

The Richmond survey also indicated bullish prospects for the coming months, as firms anticipate shipments, new orders, backlogs, capacity utilization and capital expenditures to all rise at a solid pace in the coming months. Manufacturers plan on expansive hiring as well, with the employment index jumping 12 points to 32.

Two components of the survey missed expectations, the finished goods index, which grew three points to 12, and the raw materials inventory index, which fell seven points to 11.

The increases in the Richmond survey follow similar strong results from the latest manufacturing reports produced by Federal Reserve branches in Dallas, New York, Kansas City and Philadelphia.