Research >> Economics
Kansas City Fed Manufacturing Activity increased modestly in February
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Tenth District manufacturing activity increased modestly in February, reaching positive territory for the first time in eight months. Expectations for future activity remained at solid levels, and the month-over-month price indexes increased at a moderate pace. District firms continued to expect higher prices in the next 6 months.
Factory Activity Increased Modestly in February
The month-over-month composite index was 5 in February, higher than -1 in January and -5 in December. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The increase in district manufacturing activity was driven by both durable and non-durable goods plants, particularly food and transportation equipment producers. Most month-over-month indexes moved into positive territory in February, with many reaching their highest levels in over a year. However, the order backlog and employment indexes continued to fall. Year-over-year factory indexes rebounded strongly, with the composite index jumping from -7 to 5. The future composite index remained solid, inching slightly higher from 14 to 16.
Special Questions
This month contacts were asked special questions about how several global developments were affecting their businesses. Over 40 percent of District manufacturing contacts reported negative effects from Coronavirus so far in 2020. Looking ahead, over 50 percent of manufacturers expect negative effects from Coronavirus for the rest of 2020, but 46 percent of firms anticipated some positive effects from recently signed trade deals this year.
Posted: February 27, 2020 Thursday 11:00 AM