Research >> Economics
Kansas City Fed Manufacturing Activity Slowed A Bit
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Growth in Tenth District manufacturing slowed in July after a solid rebound in June. However, producers remain generally upbeat about future activity. Price indexes were little changed from the previous month, though plans to raise selling prices eased somewhat.
The month-over-month composite index was 3 in July, down from 14 in June but up from 1 in May. 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 in July. Most month-over-month indexes fell in July. The production index plunged from 25 to 0, and the shipments, new orders, and order backlog indexes also decreased. The employment index dropped from 17 to 4, and the new orders for exports index posted a negative reading for the first time since mid-2009. Both inventory indexes fell after gaining last month.
The year-over-year factory indexes eased slightly, but remained at solid levels. The composite year-over-year index edged down from 31 to 24, and the production, new orders, shipments, and order backlog indexes also fell. The employment index moved slightly lower after reaching a sixyear high last month. The capital expenditures index eased from 13 to 8, while the new orders for exports index was basically unchanged. Both inventory indexes fell for the second straight month.
Future factory indexes were little changed from last month, as producers emained fairly optimistic about activity later this year. The future composite index was basically unchanged at 14, and the future new orders index also remained the same. The future production index eased slightly from 25 to 21, while the future shipments index increased. The future employment index was largely unchanged at 17, and the future capital expenditures index rose after falling last month. The future finished goods inventory index moved into negative territory, while the future raw materials index was stable.
Prices were somewhat mixed, but most indexes posted similar readings to the previous month. The month-over-month raw materials price index edged higher from 36 to 39, and the finished goods price index also increased slightly. The year-over-year finished goods price index rose from 45 to 50, while the finished goods price index was basically unchanged. The future raw materials price index moved up from 55 to 60, while the future finished goods price index fell, indicating slightly fewer firms plan to pass recent cost increases through to customers.
Posted: July 28, 2011 Thursday 11:00 AM