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Kansas City Fed Manufacturing Activity declined further in April
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Tenth District manufacturing activity declined further in April, while producers’ expectations improved slightly from last month. Most price indexes continued to decrease, particularly for future raw materials. In a special question about the impact of the stronger dollar, many firms said that although it has put downward pressure on input prices, international sales have weakened considerably.
The month-over-month composite index was -7 in April, down from -4 in March and 1 in February. The last time the composite index was lower was in May 2009. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The overall slower growth was mostly attributable to declining durable goods manufacturing, including a sharp decline in aircraft production and continued weakness in metals and machinery. Looking across District states, the most severe declines continued to be in energy-producing states such as Oklahoma and Wyoming. Most other month-over-month indexes also decreased from the previous month. The shipments index fell from 0 to -7, and the order backlog and employment indexes dropped to their lowest levels since 2009. In contrast, the production index remained unchanged at -2, and the new orders index rose slightly but still remained negative. The finished goods inventory index increased from -1 to 5, while the raw materials inventory index was basically unchanged.
Year-over-year factory indexes were mixed but remained negative overall. The composite year-over-year index inched lower from -2 to -3, and the employment index fell to its lowest level since July 2007. The production, shipments, and order backlog indexes all improved slightly but were still in negative territory. The new orders index was unchanged, while the capital expenditures index rose from 3 to 8. The finished goods inventory index decreased from 9 to 4, but the raw materials inventory index was unchanged.
Most future factory indexes increased slightly in April. The future composite index edged higher from 4 to 6, and the future production and order backlog indexes also rose modestly. The future new orders index jumped from 6 to 21, and the future capital expenditures index also improved. In contrast, the future employment index fell into negative territory for the first time since 2009, and the future new orders for exports indexes dropped from 4 to -6. The future finished goods inventory index moved higher from -9 to -2, while the future raw materials inventory index was basically unchanged.
Most price indexes continued to decrease in April. The month-over-month finished goods price index eased from -6 to -10, while the raw materials price index edged higher. The year-over-year raw materials price index fell from 22 to 7, and the finished goods price index inched lower. The future raw materials price index dropped from 24 to 9, its lowest level since May 2009, and the future finished goods price index also fell.
Posted: April 23, 2015 Thursday 11:00 AM