Richmond Fed manufacturing index slips to -2 in September as orders and shipments retreat

The Federal Reserve Bank of Richmond’s monthly factory survey turned negative in September, with the composite manufacturing index sliding to -2 from a reading of 4 in August. The result matched forecasts but still marks a meaningful shift for a regional economy that had been showing modest momentum earlier in 2026.

The numbers behind the headline

Shipments, one of the most direct measures of factory output, fell to -5 in September from a strongly positive 11 in August. That’s a 16-point swing in a single month.

New orders followed a similar path, dropping to -6 from 3.

Local business conditions told the same story. That sub-index fell to -6 in September, reversing from a reading of 4 the prior month.

The one exception was employment, which improved to +7 from -2. The employment expectations index fell sharply to 8 from 20.

Price pressures also picked up. The average growth rate in prices paid by manufacturers rose in September. Projections for both prices paid and prices received moderated over a 12-month horizon.

What region this covers and why it matters

The Richmond Fed’s survey covers the Fifth Federal Reserve District, which includes Washington DC, Maryland, Virginia, North Carolina, South Carolina, and most of West Virginia.

The September reading was released on September 22, 2026.

Prior readings earlier in 2026 had shown a modest positive trend before this latest downturn.

What to watch from here

Future expectations for shipments and new orders remained positive in the survey, meaning respondents still believe conditions will improve over the coming months.

Rising prices paid in a period of falling orders compresses margins for manufacturers and limits their ability to pass costs along when demand is already softening.

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