The Fifth District Survey of Manufacturing Activity by the Richmond Federal Reserve more than doubled in November, soaring from 12 to 30. The actual results are double the median forecast of 15 and much stronger than the forecast range, which was from 11 to 16.
It’s the highest the Fifth District Survey of Manufacturing Activity has been since 1993. The extraordinarily strong reading was fueled by strengthening conditions across all three components of the index. Even though the indicators for current wages and finished goods fell in November — from 24 to 21 and 14 to 9, respectively — both of the components maintained extremely positive values.
The shipment index skyrocketed as a percentage from 9% to 33%, as did the volume of orders (17% to 35%).
Manufacturing firms in the Fifth District remained very optimistic that economic growth for their sector will continue over the next 6 months. A smaller percentage of manufacturing firms raised their expectations than those in October in all areas, save for wages and capital expenditures. The percentage of those expecting higher wages rose from 27% to nearly one-third — 32%.
The survey also found manufacturing firms reported stronger price growth in November. In fact, growth rates for both prices paid and prices received reached a 3-month high. Respondents expect prices to continue to grow in the next 6 months, though at a slightly lower rate.