Manufacturing activity rebounds in August, despite trade war
Manufacturing activity in five states and the District of Columbia rebounded to a moderate level in August, despite a U.S.-China trade war that is making some exports more expensive.
That’s according to the Richmond Fed monthly Survey of Manufacturing Activity, released Tuesday. The results were modestly positive, compared to July’s weak manufacturing activity.
“The composite index rose from -12 in July to 1 in August, buoyed by increases in the indexes for shipments and new orders,” the survey found. “However, the third component, employment, fell. Firms reported increasing capital expenditures and inventories, but the measure of local business conditions was slightly negative. Manufacturers were, however, optimistic that conditions would improve in the next six months.”
The survey indicated that while wage growth continues, firms were having difficulty finding employees with the necessary skills for open positions — and it anticipates that both of these trends will continue. Also, “many firms saw employment decline while the average workweek increased in August,” according to the survey.
The survey is sent to about 200 manufacturing firms in South Carolina, North Carolina, Virginia, Maryland, the District of Columbia and most of West Virginia to understand how their businesses are doing each month, with questions about everything from “shipments, new orders, order backlogs, inventories, and expectations for business activity during the next six months.”