Research >> Economics
Kansas City Fed Manufacturing Activity Edged Higher
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Growth in Tenth District manufacturing activity edged higher in October. Expectations for future activity rebounded after easing somewhat the past few months. Price indexes were mixed, with a slight drop in indexes for monthly materials and selling prices but continued expectations of moderately increasing prices heading forward.
The month-over-month composite index was 8 in October, up from 6 in September and 3 in August. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Contrary to recent months, the increase was mainly concentrated in nondurable goods plants, particularly for food and chemicals, while durable goods producers reported a slight slowing in activity. Most other month-over-month indexes also improved modestly in October. The production index rose from 3 to 6, and the shipments, order backlog, and new orders for exports indexes also edged up. In contrast, the new orders index fell slightly from 5 to 3, while the employment index remained unchanged. The raw materials inventory index eased from 11 to 9, but the raw materials inventory index inched higher.
Most year-over-year factory indexes improved in October. The composite year-over-year index rebounded from 15 to 23, and the production, shipments, and new orders indexes also increased. The employment index rose from 18 to 27, and the capital expenditures index continued to climb higher. In contrast, the order backlog index slowed somewhat, and the new orders for exports index also moderated slightly. Both inventory indexes increased modestly.
The majority of future factory indexes rebounded solidly after easing somewhat last month. The future composite index increased from 6 to 13, and the future production, shipments, and new orders indexes also improved. The future employment index jumped from 9 to 16, and the capital expenditures index also rose considerably after posting its lowest level of the year. The future new orders for exports index edged higher from 1 to 9, while the future order backlog index was unchanged. The future raw materials inventory index moved into positive territory, while the future finished goods inventory index was stable.
Price indexes were mixed in October. The month-over-month raw materials price index eased from 30 to 24, and the finished goods price index also fell. The year-over-year finished goods price index decreased from 52 to 42, while the raw materials price index inched higher. The future raw materials and finished goods price indexes were both unchanged, with the finished goods price index at 25, indicating some firms plan to pass recent cost increases through to customers.
Posted: October 27, 2011 Thursday 11:00 AM