Research >> Economics
Kansas City Fed Manufacturing Activity slowed slightly in August
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Growth in Tenth District manufacturing activity slowed slightly in August, but producer’ expectations for future activity remained solid. Price indexes indicated little change from the previous month , but expectations for future growth were slightly lower.
The month-over-month composite index was 3 in August, down from 9 in July and 6 in June. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The overall slowing in manufacturing activity occurred at nondurable goods producers, while durable goods production increased somewhat. Most month-over-month indexes fell compared to July’s readings. The production index fell from 11 to 4 , and the shipments and new orders indexes also declined but remained above zero. The employment index was -4, the first negative result in 10 months, while the order backlog index remained relatively steady at -5. The inventory indexes were mixed , with materials slightly lower and finished goods considerably higher than in July.
Year-over-year factory indexes were mostly lower. The composite year-over-year index was unchanged at 13, while production index dropped from 24 to 8, its lowest level in seven months. The shipments, new orders, and order backlog indexes also fell. In contrast, the capital expenditures index rose from 10 to 14, after falling last month. The raw materials and finished good inventory indexes both increased considerably over last month.
Future factory indexes were mixed in August. The future composite index edged up from 15 to 17, and the future production, new orders, and order backlog indexes also rose. The future new orders for exports index increased to its highest level in seven months, while the future shipments index decreased from 28 to 20. The future employment index fell moderately, from 23 to 15, and the future capital expenditures index also declined. Both future inventories indexes increased moderately after being in negative territory last month.
Price indexes were once again mixed this month. The month-over-month raw materials price moved up slightly, while the finished goods price index was somewhat lower. The year-over-year finished goods price index eased from 37 to 35, but the raw materials price index remained unchanged. The future raw materials price index continued to edge lower from 46 to 43, and the future finished goods price index also decreased, indicating fewer firms plan to pass cost increases through to customers.
Posted: August 28, 2014 Thursday 11:00 AM