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Kansas City Fed Manufacturing Activity continued to decline modestly in August
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Tenth District manufacturing activity continued to decline modestly. Expectations for future activity remained solid, and the price indexes were mixed. In a special question this month, most firms reported no plans to change employee benefits for next year, but more firms expect decreases in benefits than expect increases.
The month-over-month composite index was -4 in August, up from -6 in July but down from 2 in June. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Non-durable goods production continued to grow modestly, while durable goods activity was less negative than last month, particularly for machinery and electronic equipment. Most month-over-month indexes were similar to levels posted the previous month. The production index improved from -15 to -7, and the shipments index also rose somewhat. The new orders and order backlog indexes remained moderately negative, while the employment and new export orders indexes fell slightly. The raw materials inventory index increased from -7 to -1, while the finished goods inventory index fell back into negative territory.
Year-over-year factory indexes improved slightly but remained below zero. The composite year-over-year index inched higher from -15 to -12, and the shipments, new orders, and order backlog indexes also rose slightly. The production, capital spending, and new orders for exports indexes were all unchanged at negative levels. The employment index dropped from -12 to -15 after improving last month. The raw materials inventory index increased from -14 to -10, while the finished goods inventory index fell further.
Most future factory indexes were stable compared to last month’s readings, and moderately positive. The future composite index eased from 14 to 11, and the future production, shipments, and new orders indexes also edged lower. In contrast, the future employment index jumped from 6 to 12 and the future capital spending index also rose slightly. The future new orders for exports index was unchanged at 1, while both future inventory indexes fell into negative territory.
Price indexes were mixed in August. The month-over-month finished goods price index rose from -11 to -7, while the raw materials price index inched lower. The year-over-year finished goods price index rose from dropped from 12 to 1, and the raw materials price index decreased sharply to its lowest level in 4 months. The future finished goods price index increased further from 13 to 17, while the future raw materials price index was unchanged.
Posted: August 25, 2016 Thursday 10:00 AM