Research >> Economics
Kansas City Fed Manufacturing Activity Rebounded
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Tenth District manufacturing activity rebounded in January, and expectations remained at solid levels. Price indexes also increased, with a greater number of firms passing through materials price increases. The month-over-month composite index was 7 in January, up from revised totals of -2 in December and 4 in November. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes.
Manufacturing activity increased in both durable and nondurable goods-producing plants, with particular strength in chemical, fabricated metal, and aircraft production. Most other month-over-month indexes also improved in January. The production and shipments indexes jumped to their highest levels since June, and the new orders index climbed from -2 to 8. The order backlog index was positive for the first time since last summer, and the employment index rebounded from -5 to 9. The new orders for exports index increased and the raw materials inventory index moved higher, while the finished goods inventory index was unchanged.
Growth in year-over-year factory indexes was mixed in January. The composite year-over-year index edged up from 11 to 15, and the new orders and order backlog indexes also improved. In contrast, the production, shipments, and employment indexes eased slightly. The capital expenditures index fell from 17 to 8, while the new orders for exports and supplier delivery time indexes were unchanged. Both inventory indexes edged higher.
Expectations for future factory activity remained solid, although the pace of growth slowed for some indexes. The future composite index was unchanged at 12 for the third straight month, while the future production index rose considerably. The future shipments and new orders indexes eased slightly, but the future order backlog and employment indexes increased after falling somewhat last month. The future capital expenditures index climbed from 13 to 22, matching the highest level over the last year – posted in March 2011. The future new orders for exports index edged up, while both inventory indexes fell into negative territory.
Price indexes all climbed higher this month. The month-over-month raw materials price index jumped from 27 to 42, and the finished goods price index also rose. The year-over-year finished goods price index inched higher, and the raw materials price index increased slightly. The future raw materials price index posted its highest level since early 2011, and the future finished goods price index rose from 19 to 28, indicating more firms plan to pass recent cost increases through to customers.
Posted: January 26, 2012 Thursday 11:00 AM