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Kansas City Fed Manufacturing Activity Moderated
Growth in Tenth District manufacturing activity moderated somewhat in April, but remained solid. Most producers continued to report healthy expectations. Raw materials prices continued to rise, and more producers raised selling prices.
The month-over-month composite index was 14 in April, down from 27 in March and 19 in February. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Growth in factory activity eased at both durable and non-durable goods producing plants. Most other month-over-month indicators also fell slightly in April but remained solid. The production index decreased from 39 to 17, and the shipments, new orders, and order backlog indexes also moved lower. The employment index dropped from 25 to 17, and the new orders for exports index eased for the second straight month. The raw materials inventory index fell from 20 to 7, while the finished goods inventory index was unchanged.
Growth in most year-over-year factory indexes increased from the previous survey. The composite year-over-year index inched higher from 30 to 31, and the production, new orders, shipments, and order backlog indexes also rose in April. The employment index eased from 28 to 25, but still remains at its second-highest level since early 2007. The new orders for exports index edged higher, while the capital expenditures index dropped from 14 to 4. Both inventory indexes declined only slightly.
Future factory indexes were mixed, but continued to show solid readings. The future composite index edged down from 23 to 20, and the future production and capital spending indexes also fell marginally. In contrast, the future shipments, new orders, and order backlog indexes increased after falling the previous month. The future employment index moved higher from 19 to 21, while the future new orders for exports index eased a bit. The future raw materials inventory index decreased from 15 to 3, and the future finished goods index also fell.
Price indexes were varied in April, with more firms raising selling prices and materials prices continuing to rise. The month-over-month raw materials price index eased slightly, while the finished goods price index increased from 21 to 28. The year-over-year finished goods price index edged lower, but the raw materials price index was unchanged. The future raw materials price index dropped somewhat from a record high level, but the future finished goods price index rose for the third straight month, indicating more firms plan to pass recent cost increases through to customers.
Posted: April 28, 2011 Thursday 11:00 AM