An economic survey of about 190 manufacturing plants within the Richmond Federal Reserve Bank region that examines conditions in the manufacturing industry. The Richmond region is the Fifth Federal Reserve District, which includes Washington, D.C., Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia. The report is released about one week after the beginning of a new month and after the national Institute for Supply Management (ISM) Index is released. The index’s changes in shipments are indicators of current conditions. Changes in the prices of raw or finished goods give an indication of pricing trends. Expected shipments, backlogs, and new orders are indicators of future conditions. Because the report is published a short time after the data is collected, it is very useful for getting a quick snapshot of economic conditions. However, the long-term effect of the Richmond Fed Manufacturing Survey on financial markets is usually limited.
There are four indexes that comprise the Richmond Fed Manufacturing Survey. Those are: shipments, new orders, backlog of new orders, and six-month shipment outlook. The indexes can range from +100 to –100 and indicate the general direction of the indicators by showing how the number of plants with improving conditions offset those with worsening conditions. Index values greater than zero suggest expansion, while values less than zero indicate a contraction. Data values are seasonally adjusted.