Research >> Economics
Kansas City Fed Manufacturing Activity Rose Moderately
Tenth District manufacturing activity rose moderately from last month, although producers’ expectations for future activity eased somewhat. Price indexes were mixed, with a reduction in future materials prices but a slight increase in future selling prices.
The month-over-month composite index was 6 in July, up from -5 in June and 2 in May. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Production increased at both durable and non-durable goods-producing plants, particularly in food, machinery, and aerospace products. Most other month-over-month indexes also improved. The production index increased from -17 to 21, its highest level since June 2011, and the shipments and new orders indexes also rose markedly. In contrast, the order backlog index edged lower from -4 to -7, and the employment index also eased slightly. The finished goods inventory index fell from 6 to 1, while the raw materials inventory index was unchanged.
The majority of year-over-year factory indexes were slightly lower or unchanged from the previous month. The composite year-over-year index eased from 3 to 2, and the new orders and order backlog indexes also decreased.
The production, employment, and new orders for exports indexes remained stable, while the capital expenditures index edged down from 16 to 11 after increasing last month. On the other hand, the shipments index increased from 6 to 9, and both inventory indexes also moved higher.
Most future factory indexes moderated somewhat in July but still remained relatively solid. The future composite index eased from 12 to 7, and the future production, shipments, and new orders indexes also edged lower. The future order backlog index declined from 14 to 0, and the future capital expenditures index decreased for the second straight month. The future new orders for export index fell into negative territory, while the future employment index was unchanged. The raw materials inventory index declined from -2 to -13, and the finished goods inventory index also decreased.
Price indexes were mixed. The month-over-month finished goods price index moderated from 3 to 0, while the raw materials price index increased modestly. The year-over-year raw materials price index eased somewhat, while the finished goods price index moved higher from 30 to 40. The future raw materials price index fell from 46 to 36, but the future finished goods price index inched higher, indicating more firms plan to pass recent cost increases through to customers.
Posted: July 25, 2013 Thursday 11:00 AM