Research >> Economics
Kansas City Fed Manufacturing Activity Continued to Grow
Tenth District manufacturing activity continued to grow in November, and producers’ expectations for future activity improved moderately. Respondents continued to comment about uncertainty holding back activity, although several firms reported an uptick in hiring plans for skilled positions. Most price indexes decreased, especially for raw materials, but remained well above zero.
The month-over-month composite index was 7 in November, up from 6 in October and 2 in September. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The production index fell slightly at nearly all types of durable goods plants, while production of nondurable goods products increased, particularly for chemicals and plastics. Most other month-overmonth indexes improved over last month. The new orders index jumped from 3 to 15, and the order backlog and employment indexes reached their highest levels since early 2012. In contrast, the production index moderated from 14 to 11, and the shipments and new orders for exports indexes also slipped somewhat. The raw materials inventory index decreased from 12 to 4, and the finished goods inventory index fell into negative territory.
The majority of year-over-year factory indexes showed improvement in November. The composite year-over-year index edged up from 7 to 9, and the production, shipments, new orders, and order backlog indexes also increased. The capital expenditures index rose markedly from 7 to 15, while the employment index was unchanged. The raw materials inventory index eased from 3 to 0, and the finished goods inventory index also declined.
Most future factory indexes rebounded after falling somewhat last month. The future composite index rose from 8 to 12, and the future production, shipments, and new orders indexes also increased. The future employment index jumped from 3 to 20, its highest level since March 2012, and the future workweek index also rose sharply. The future order backlog and capital expenditures indexes were basically unchanged. Both future inventory indexes remained flat over last month.
Price indexes moderated in November, particularly for inputs. The month-over-month raw materials price index fell from 26 to 17, and the finished goods price index also edged lower. The year-over-year raw materials price index decreased from 48 to 39, while the finished goods price index was unchanged. The future raw materials price index dropped from 45 to 31, and the future finished goods price index eased for the third straight month, indicating fewer firms plan to pass recent cost increases through to customers.
Posted: November 22, 2013 Friday 11:00 AM