Research >> Economics
Kansas City Fed Manufacturing Activity declined modestly in July
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Tenth District manufacturing activity declined modestly after last month’s rebound. Expectations for future activity continued to increase, and the price indexes were mixed.
The month-over-month composite index was -6 in July, down from 2 in June and -5 in May. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Non-durable goods producing plants reported a smaller decline in activity, but durable goods production dropped sharply, particularly for metals and electronic equipment. Most month-over-month indexes were lower than in June. The production index dropped from 12 to -15, and the shipments and news orders indexes also fell. The employment index inched down to -5, while the order backlog index remained unchanged. The raw materials inventory index eased further, while the finished goods inventory index increased from -5 to 5.
Year-over-year factory indexes were mixed but remained weak. The composite year-over-year index was flat at -15, while the production, shipments, and new orders indexes edged down slightly. The order backlog index was unchanged, and the employment index inched higher. The capital spending index fell from -3 to -14, reversing the increase reported in June. Both inventory indexes increased modestly but remained negative.
Most future factory indexes increased considerably in July. The future composite index increased from 7 to 14, its highest in over a year. The future production, shipments, new orders, and order backlog indexes also increased markedly. The future capital spending index edged down from 8 to 3, and the employment index also eased somewhat. Both future inventory indexes increased into positive territory for the first time in eighteen months.
Price indexes were mixed in July. The month-over-month finished goods price index fell from -4 to -11, and the raw materials price index inched lower. The year-over-year finished goods price index rose from 8 to 12, while the raw materials price index decreased modestly. The future finished goods price index moved higher from 5 to 13, and the future raw materials price index climbed from 9 to 17.
Posted: July 28, 2016 Thursday 11:00 AM