The Richmond Fed manufacturing index covering the Fifth District finds firms saw “robust growth in May,” rebounding from −3 in April to 16 in May. The gain in the composite index was fueled by growth in the indexes for shipments, new orders, and employment.
Local business conditions also moved back into expansionary territory, after weakening in April, and firms remained optimistic that growth would continue in coming months.
Survey results indicate that both employment and wages rose among manufacturing firms in May. Wages have increased significantly under the Trump Administration after years of stagnate to zero growth.
The downside is that firms continue to struggle to find the skills they need in potential employees. They expect this struggle to continue in the next 6 months but also expect employment and wages to increase further.
Many manufacturing firms continued to increase spending in May. The growth rate of prices paid continued to rise, on average, but firms seemed able to pass some of change through to customers, as prices received also grew at a faster rate.