Research >> Economics
Kansas City Fed Manufacturing Activity Improved due to better weather
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Growth in Tenth District manufacturing activity increased in March, and producers’ expectations were mostly stable at solid levels. Some contacts attributed improved activity to better weather conditions. Many firms cited difficulties finding qualified workers with some additional pressure on wages. Most price indexes were stable or slightly higher.
The month-over-month composite index was 10 in March, up from 4 in February and 5 in January. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Manufacturing activity increased at both durable and non-durable goods-producing plants, particularly for plastic and machinery products. Other month-over-month indexes also improved. The production index jumped from 3 to 22, its highest level in 3 years, and the shipments and new orders indexes also climbed higher. The order backlog index edged up from -4 to -1, and the new orders for exports index also increased slightly. The employment index moderated from 3 to 0, and both inventory indexes eased somewhat.
Most year-over-year factory indexes improved slightly over last month. The composite year-over-year index rose from 8 to 12, and the production, new orders, and order backlog indexes also increased. The capital expenditures index inched higher from 18 to 20, its highest level in over a year, and the new orders for exports index also moved into positive territory. The employment index remained unchanged at 7, while the shipments index eased from 13 to 11. Both inventory indexes edged slightly lower.
Future factory indexes were generally little changed and solid overall. The future composite index was stable at 11, while the future production, shipments, and new orders indexes edged higher. The future order backlog and employment indexes moderated slightly, and the future new orders for exports index also eased somewhat. The future capital expenditures index dropped from 24 to 9, its lowest level in over a year. The future finished goods inventory index moved into negative territory, and the future raw materials inventory index fell from -1 to -8.
Most price indexes increased slightly in March. The month-over-month finished goods price index edged up from 7 to 10, while the raw materials price index was unchanged. The year-over-year raw materials index jumped from 37 to 57, and the finished goods price index rose modestly. The future raw materials price index inched higher from 35 to 38, while the future finished goods price index moderated somewhat, indicating fewer firms plan to pass recent cost increases through to customers.
Posted: March 27, 2014 Thursday 11:00 AM