Manufacturing activity unexpectedly grew in October driven by broad-based recovery, the Richmond Federal Reserve said Tuesday. The regional central bank said its manufacturing index printed a reading of 8, well ahead of negative-9 reading expected in a consensus estimate compiled by Econoday.
All three components of the survey shipments, new orders, and employment increased and manufacturers reported a rise in orders backlog. They were also optimistic that business conditions in the next six months would continue to improve, according to the survey.
The shipment index climbed to 24 from 15 in September, and new order volume increased to 7 from negative 14. Future new-order volume rose to 33 from 22, and the employment sub-index leapt to 13 from 3.
The survey comes at a time of concern about slowing in the domestic manufacturing sector, in part as the US is engaged in a trade war with China, the world’s second-largest economy. The Institute for Supply Management said earlier this month its U.S. manufacturing purchasing managers’ index was 47.8% in September, the lowest reading since June 2009.
The Richmond Fed said manufacturers told it that employment and wages grew in October and that they expect growth in the near term. The future employment index printed at 20, up from 16 last month. Prices paid were at a pace of 2.4% from 2.68% previously, but prices received fell to 1.71% from 2.59%.
“However, manufacturers still struggled to find workers with the necessary skills in October and expected this difficulty to persist in the coming months,” said the Richmond Fed, whose survey of the Fifth Federal District includes Washington, D.C. Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.
The regional Fed typically receives 90 to 95 responses from the 200 contacts it reaches for the survey.
This post was originally published on Health Opinion