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Kansas City Fed Manufacturing Activity continued to expand solidly in July
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Tenth District manufacturing activity continued to expand solidly in July, with the composite index dipping slightly after May’s record-high reading. Expectations for future growth remained high, despite many firms citing labor tightness and tariffs as increasingly worrisome. Price indexes also continued to rise.
The month-over-month composite index was 23 in July, down from readings of 28 in June and 29 in May. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Factory activity increased solidly at durable and nondurable goods plants, particularly for petroleum and coal products, minerals, fabricated metal, computers and electronics, and transportation equipment. Month-over-month indexes were mixed compared with the previous month, but most indexes remained at high levels. The employment index inched up while the order backlog and new orders for exports indexes were virtually unchanged. The production and shipments indexes fell moderately, and the new orders index eased somewhat. The raw materials index fell modestly and the finished goods inventory index also dipped slightly.
Most year-over-year factory indexes inched up in July. The composite index increased marginally from 43 to 44. The production, order backlog, capital expenditures, and new orders for exports all improved. However, the shipments and new orders indexes declined modestly and the employment index was mostly unchanged. The raw materials inventory index dipped from 36 to 32 and the finished goods inventory index eased from 26 to 23.
Future factory activity indexes were mixed, but remained at high levels. The future composite index eased from 36 to 34. The future order backlog and employment indexes both improved modestly, and the capital expenditures and new orders for exports indexes inched up. The future shipments index remained at 52 while the future production and new order indexes dipped slightly. The future raw materials index moderated from 30 to 15, while the future finished goods inventory index declined from 23 to 7.
Most price indexes increased in July. The month-over-month finished goods price index rose from 22 to 27 and the raw materials price index increased from 47 to 52. The year-over-year finished goods price index was unchanged at 60, while the year-over-year raw materials price index rose from 79 to 86. The future finished goods price index grew from 40 to 43 and the future raw materials price index inched up from 67 to 68.
Posted: July 26, 2018 Thursday 11:00 AM