Research >> Economics
Kansas City Fed Manufacturing Activity was flat in June
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Tenth District manufacturing activity was flat in June, while expectations for future activity remained solid. Price indexes were lower than a month ago, indicating that prices continue to rise but at a slower pace. The raw materials price index was lower than a year ago, and expectations for future price indexes also declined.
Factory Activity Mostly Flat in June
The month-over-month composite index was 0 in June, slightly lower than 4 in May and 5 in April. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The change in manufacturing activity was mostly driven by a decline at durable production plants, especially for computers, electronic products, and transportation equipment. Most month-over-month indexes edged lower in June, with a number of indexes decreasing, including the materials inventory index. However, the new orders index inched higher. Nearly all of the year-over-year factory indexes decreased to their lowest levels since late 2016, and the composite index fell from 23 to 4. The future composite index remained solid, inching down from 12 to 11, while expectations for production and new orders moved higher.
Special Questions
This month contacts were asked special questions about how their firm’s plans and expectations have changed for the remainder of 2019 and about their current level of confidence in the U.S. economy. Over 21 percent of manufacturing contacts noted their plans for capital expenditures had increased for the remainder of 2019, and nearly 24 percent indicated their employment plans had increased. However, a similar share of contacts expected their plans for capital expenditures and employment to decrease for the remainder of 2019. About 29 percent of contacts said they expect wages to rise more than originally expected in the second half of 2019. Nearly 70 percent of respondents reported they were confident in the U.S. economy, and only 4 percent reported no confidence. Additionally, 26 percent of contacts indicated that their firm or firm’s suppliers had changed their sources of inputs as a result of the various tariffs that have been put in place.
Posted: June 27, 2019 Thursday 11:00 AM