Research >> Economics
Kansas City Fed Manufacturing Activity continued to expand at a strong pace in May 2021
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Tenth District manufacturing activity continued to expand at a strong pace, and expectations for future activity remained solid. The index of prices paid for raw materials compared to a month ago posted a new survey record high for the second straight month, and prices received for finished goods also surpassed historical levels. Price indexes vs. a year ago also posted record highs, with 98% of firms reporting higher materials prices compared to a year ago. Moving forward, district firms expected materials prices and finished goods prices to continue to increase over the next six months.
The month-over-month composite index was 26 in May, modestly lower than 31 in April, but even with the composite index of 26 from March. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The growth in district manufacturing activity was driven higher by increased activity at durable goods plants, especially for primary and fabricated metals, machinery, furniture, and transportation equipment manufacturing. The month-over-month index for new orders expanded at a faster pace in May. Other month-over-month indexes remained highly positive, indicating expansion, but slowed slightly from record levels in April. Inventories for materials and finished goods also remained positive. Year-over-year factory indexes rose further in May, and the year-over-year composite index climbed from 35 to 43. The future composite index remained solid at 33, similar to previous months but with an increase in expectations for production, shipments, and new orders.
Posted: May 27, 2021 Thursday 11:00 AM