Research >> Economics
Kansas City Fed Manufacturing Activity Rebounded Solidly
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Growth in Tenth District manufacturing activity rebounded solidly in June after a brief slowdown last month, and producers remained generally optimistic about future activity. Raw materials price indexes fell for the second straight month, but more producers plan to raise selling prices in the months ahead.
The month-over-month composite index was 14 in June, up from 1 in May and equal to 14 in April. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Growth in factory activity increased at both durable and non-durable goods producing plants. Most other month-over-month indicators also improved in June. The production index jumped from -2 to 22, and the shipments, new orders, and order backlog indexes also posted solid gains. The employment index increased from 9 to 17, and the new orders for exports index also edged higher. The raw materials inventory index climbed from 1 to 16, while the finished goods inventory index was unchanged.
The year-over-year factory indexes were very similar to recent months, and solidly positive. The composite year-over-year index edged up from 30 to 31, and the new orders and shipments indexes also improved slightly. The employment index increased from 25 to 29, reaching its highest level since early 2007. The production index eased from 41 to 40, and the capital expenditures and new orders for exports indexes were also largely unchanged. The finished goods inventory index fell from 17 to 12, while the raw materials inventory index inched higher.
Future factory indexes were mostly positive, as producers remained fairly optimistic about activity in the months ahead. The future composite index increased from 13 to 15, and the future new orders index also improved. The future production index eased somewhat, and the future shipments, order backlog, and employment indexes also slowed marginally. The future capital expenditures index fell from 18 to 10, and the future new orders for exports index was basically unchanged. The future raw materials inventory index rose modestly from 1 to 3, but the future finished goods inventory index eased slightly.
Price indexes were mixed for finished goods, but raw materials indexes fell further indicating slower price appreciation. The month-over-month raw materials price index dropped from 54 to 36, and the finished goods price index also edged lower. The year-over-year raw materials price index eased from 87 to 85, while the finished goods price index remained unchanged. The future raw materials price index fell from 58 to 55, while the future finished goods price index increased somewhat, indicating slightly more firms plan to pass recent cost increases through to customers.
Posted: June 30, 2011 Thursday 11:00 AM