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Kansas City Fed Manufacturing Activity edged higher in Sept
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Growth in Tenth District manufacturing activity edged higher in September, and producers’ expectations for future activity maintained the solid level of the previous survey. Price indexes showed a mild decline from the previous month, and expectations for future price growth were mixed. Several firms continued to comment about difficulties finding qualified labor, resulting in some wage pressures.
The month-over-month composite index was 6 in September, slightly higher than 3 in August but lower than 9 in July. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The growth in manufacturing activity continued to occur primarily at durable goods-producing plants. Nondurable goods-producers experienced only a modest rise, with activity at some food processing plants continuing to decline in the face of higher beef prices. The production index increased from 4 to 12, and the shipment index also grew from a reading of 2 in August to 14. The employment index increased significantly from -4 in the last survey period to 7 in September. Most other month-over-month indexes eased compared to August’s readings. The new orders and backlog of orders indexes both declined modestly. The inventory indexes also both experienced moderate declines, with materials now at -6 and finished goods at -1.
Year-over-year factory indexes were mostly higher this survey period. The composite year-over-year index rose to 15, as compared to the previous survey reading of 13. The production index was moderately higher at 14, while capital expenditures and backlog of orders were also moderately higher. The volume of shipments index increased from 10 to 16 and the materials inventory increased from 15 to 18. The volume of new orders and number of employees were also slightly higher. Conversely, supplier delivery time and finished goods inventories indexes were lower at 12 and 8, respectively.
Most of the future factory indexes were mildly lower compared to August, although the future composite index maintained its level of 17 due to strong expectations for production. The future production and future volume of shipments indexes were both at their highest levels in 5 months. The future volume of new orders and future backlog of orders also increased slightly. In contrast, the future new orders for export index fell to 0 from a previous level of 9. Both future inventories indexes declined with future materials inventory declining the most, from 7 to 2.
The majority of price indexes experienced a decline this month. The month-over-month raw materials price index was steady at 20, while the finished goods price index decreased from 6 to 2. The year-over-year finished goods price index eased slightly once again, but the raw materials price index dropped from 55 to 45. The future raw materials price index also declined, yet the future finished goods price index saw its first increase in four months.
Posted: September 25, 2014 Thursday 11:00 AM