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Kansas City Fed Manufacturing Activity continues moderate paced expansion in Dec
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Tenth District manufacturing activity continued to expand at a moderate pace in December, and producers’ expectations for future activity remained at solid levels. Most price indexes grew at a slower pace, especially materials prices.
The month-over-month composite index was 8 in December, up slightly from 7 in November and 4 in October. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The slight increase in activity was mostly attributed to durable goods producers, particularly for electronics, aircraft, and machinery products, while nondurable goods production remained sluggish. Most other month-over-month indexes were also slightly higher than last month. The production and employment indexes were unchanged, but the shipments, new orders, and order backlog indexes increased markedly. However, the new orders for exports index fell from 8 to 0. The finished goods inventory index rose for the second straight month, while the raw materials inventory index eased somewhat.
Year-over-year factory indexes were mixed. The composite year-over-year index edged up from 9 to 11, and the shipments, new orders, and new orders for exports indexes also increased. The employment index jumped from 10 to 18, its highest level in nearly two years. In contrast, the production index eased from 15 to 11, and the order backlog and capital expenditures indexes also decreased. Both inventory indexes increased after two months of decline.
Future factory indexes were mostly stable at solid levels. The future composite index was unchanged at 22, while the future shipments, new orders, and employment indexes increased further. The future capital spending index jumped from 15 to 23, its highest level in five months. In contrast, the future production index eased from 34 to 30, and the future order backlog index also inched lower. The future finished goods inventory index rose from 9 to 19, while the future raw materials inventory index edged down.
Most price indexes slowed in December. The month-over-month raw materials price index decreased from 12 to 5, and the finished goods price index fell to 0. The year-over-year raw materials price index eased slightly, while the finished goods price index was basically unchanged. The future raw materials price index moderated from 33 to 25, while the future finished goods price index ticked up somewhat.
Posted: December 19, 2014 Friday 11:00 AM