Research >> Economics
Kansas City Fed Manufacturing Activity Rebounded
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Tenth District manufacturing activity increased further in February, and expectations also climbed higher. Price indexes generally moderated from the previous month, although slightly more firms indicated plans to increase prices in the future.
The month-over-month composite index was 13 in February, up from 7 in January and -2 in December, and the highest since last June. 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 notable strength in machinery, fabricated metals, and aircraft production. Other month-over-month indexes were mixed in February but remained solid. The production and order backlog indexes moved higher, and the employment index edged up from 9 to 11. In contrast, the shipments and new order indexes fell slightly, and the new orders for exports index dropped from 10 to -7. Both inventory indexes increased.
Year-over-year factory indexes improved further in February. The composite year-over-year index edged up from 15 to 21, and the shipments, new orders and order backlog indexes also rose. Both the employment and capital expenditures indexes rebounded after falling last month, but the new orders for exports index fell from 12 to 5. The finished goods inventory index increased from 11 to 20, while the raw materials inventory index remained unchanged.
Most indexes for future factory activity strengthened from the previous month. The future composite index climbed from 12 to 20, and the future production, shipments, and new orders indexes also rose. The future order backlog index jumped from 9 to 24, and the future employment index posted its highest level in a year. In contrast, the future capital expenditures index eased from 22 to 18, and the future new orders for exports index also fell. Both future inventory indexes rebounded out of negative territory.
Price indexes generally eased slightly after marked increases last month. The month-over-month raw materials price index fell from 42 to 36, and the finished goods price index also edged lower. The year-over-year finished goods price index moved slightly downward, and the raw materials price index decreased from 67 to 57. The future raw materials price index fell from 64 to 54. However, the future finished goods price index inched higher, indicating more firms plan to pass recent cost increases through to customers.
Posted: February 23, 2012 Thursday 11:00 AM