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Kansas City Fed Manufacturing Activity slowed in December
Growth in Tenth District manufacturing activity slowed in December, while expectations for future activity edged slightly higher. Price indexes were mixed, with a considerable drop in month-over-month price indexes but higher prices expected in the next six months.
The month-over-month composite index was 3 in December, down from 15 in November and 8 in October. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The slowdown in factory growth was driven by both durable and nondurable goods producers, particularly metals, electronics, and petroleum/coal products. Most month-over-month indexes fell from the previous month’s reading, although the majority remained in positive territory. Exceptions included production, dropping from 24 to -18, and shipments, falling from 31 to -3, and new orders for exports, decreasing from 6 to -7. The employment index edged slightly higher, and new orders and order backlog indexes remained moderately positive. The materials inventory index rose from 15 to 19 and the finished goods inventory index also moved up.
Most year-over-year factory indexes fell slightly from the previous month. The composite index eased from 40 to 38, and the production, shipments, and new orders indexes also decreased. The employment index edged lower from 49 to 46, while the order backlog index was relatively unchanged. The finished goods and raw materials inventory indexes both increased somewhat.
Future factory activity expectations were slightly higher overall. The future composite index increased from 16 to 20, and the future employment and capital expenditures indexes also rose moderately. On the other hand, the future production, shipments, new orders, and order backlog indexes eased modestly. The future raw materials inventory index inched higher from 3 to 6, while the future finished goods inventory index was relatively unchanged.
Price indexes were mixed in December. The month-over-month finished goods price index dropped from 23 to 2, and the raw materials price index also fell considerably. The year-over-year raw materials price index edged up from 75 to 79, while the finished goods price index eased somewhat. The future finished goods price index rose from 30 to 38, while the future raw materials price index was unchanged.
Posted: December 21, 2018 Friday 11:00 AM