Fed surveys paint a mostly lackluster picture of September manufacturing activity

Manufacturing activity was a mixed bag but generally down in various parts of the US this month, according to the latest round of Federal Reserve district surveys.

Mid-Atlantic manufacturing activity continued to soften this month, according to the Richmond Fed, as the Fed branch’s composite index for manufacturing slipped further into negative territory from August. September’s decline to -17 was harsher than the predicted -10, according to the Wall Street Journal. Manufacturers paid more in input prices this month, but prices they charged customers stayed relatively flat, the survey found.

Activity in the state of New York also declined, according to a New York Fed survey. The index dropped 21 points to -8.7, after showing gains in the final two months of summer. Manufacturers reported that new orders and shipments “fell sharply,” while inventories fell slightly and input prices remained elevated, though at a slower rate from August.

“Optimism about the outlook remained muted and employment levels are expected to be flat over the next six months,” Richard Deitz, economic research advisor at the New York Fed, said in the survey report.

The Chicago Fed, which oversees a chunk of the upper Midwest, reported a 20-point swing in its manufacturing activity index, down to -10 this month from +10 in August. The district’s survey of both manufacturing and nonmanufacturing activity showed slumps in activity, “suggesting that economic growth was below trend.” Manufacturers in the Philadelphia Fed’s territory—which covers eastern Pennsylvania, southern New Jersey, and Delaware—fared much better this month. The district’s manufacturing survey revealed a 24-point increase in September to 23.2, its highest reading since January. About half of surveyed firms reported price increases, and just 2% reported decreases.

The Kansas City Fed found that manufacturing activity increased slightly in its section of the Great Plains, western Missouri, and the Rocky Mountains.

“Regional factory activity increased in September while price growth eased slightly,” Cortney Cowley, assistant vice president of the Kansas City Fed and its Oklahoma City branch executive, said in a release. “Production and employment ticked up this month, while new orders cooled.”

Survey respondents told the KC Fed that economic uncertainty is making it more difficult to plan.

“Uncertainty in end-use markets [is] making future forecasting more speculative than usual,” said one survey respondent.