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Kansas City Fed Manufacturing Activity strengthened further in January
Growth in Tenth District manufacturing activity strengthened further in January, and firms’ expectations for future activity increased. Most price indexes rose moderately from the previous month, with some indexes reaching five to ten year highs.
The month-over-month composite index was 16 in January, higher than 13 in December and 15 in November. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Growth in factory activity improved at both durable and non-durable goods plants, particularly for machinery, aircraft, chemicals, and plastics. Most month-over-month indexes also increased. The shipments, new orders, and order backlog indexes all rose moderately. The employment index inched higher from 16 to 18, while the production index was unchanged. The raw materials inventory index climbed from 7 to 15, and the finished goods inventory index moved into positive territory.
Most year-over-year factory indexes were slightly higher in January. The composite index rose from 30 to 35, and the production, order backlog, and new orders for exports indexes also increased. The shipments and new order indexes were unchanged, while the employment and capital expenditures indexes fell slightly. The raw materials inventory index jumped from 15 to 38, and the finished goods inventory index also increased.
Future factory activity expectations improved moderately over the previous month. The future composite index increased from 23 to 29, and the future production, shipments, new orders, and order backlog indexes also rose. The future capital expenditures index jumped from 22 to 38, while the future employment index edged lower. The future raw materials inventory index increased from 7 to 15, and the future finished goods inventory index moved slightly higher.
Most price indexes increased moderately in January. The month-over-month finished goods price index climbed from 11 to 21, and the raw materials price index rose considerably, with both reaching their highest level in approximately six years. The year-over-year finished goods price index increased from 37 to 49, its highest level since July 2011, and the year-over-year raw materials price index moved moderately higher. The future finished goods price index jumped from 31 to 44, reaching a ten-year high, and the future raw materials price index also increased.
Posted: January 25, 2018 Thursday 11:00 AM