Manufacturing data suggest contraction

By Andy Lees

The Richmond Fed manufacturing index fell to -10 in August from -1 in July. The new orders sub index fell to -11 from -5, shipments fell to -17 from -1 and the backlog of orders fell to -25 from -18 and has not grown since March.Inventories were unchanged at +17. Looking through the various regional indices, the New York index implies an ISM of around 49, the Richmond index 48, and the Philly index about 42 whilst last month’s ISM forward index of new orders minus inventories also implies an ISM of 42