Research >> Economics
Kansas City Fed Manufacturing Activity Edged Higher
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Growth in Tenth District manufacturing activity edged higher in September. Expectations moderated slightly, but producers on net still anticipated increased activity over the next six months. Price indexes moved up modestly, with slightly more producers planning to raise selling prices.
The month-over-month composite index was 6 in September, up from 3 in August and 3 in July. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The increase was mainly concentrated in durable goods plants, particularly for aircraft and computer equipment, while nondurable goods producers reported a continued slowing in activity. Most other month-over-month indexes also improved modestly in September. The production index rose from -2 to 3, and the shipments, new orders, and order backlog indexes also edged up. The employment index increased for the second straight month, but the new orders for exports index fell slightly after rising last month. Both inventory indexes increased somewhat.
Year-over-year factory indexes were mixed, but remained at generally solid levels. The composite year-over-year index fell further from 21 to 15, while the production index remained unchanged. The shipments, order backlog, and new orders for exports indexes all rose slightly, and the capital expenditures index increased to its highest level in nearly a year. In contrast, the new orders index moved lower from 22 to 18, and the employment index also edged down. Both inventory indexes decreased after rising in August.
Most future factory indexes eased further in September, but producers on net still expected factory activity to rise heading forward. The future composite index edged down from 9 to 6, and the future shipments and new order indexes also fell but remained in positive territory. The future capital expenditures index dropped from 18 to 5, and the future employment index also eased. However, the future production index was unchanged, and the future order backlog index inched higher. The future finished goods inventory index rose slightly from -6 to -5, while the future raw materials inventory index fell further.
Price indexes increased slightly after generally easing in recent months. The month-over-month raw materials price index edged up from 28 to 30, and the finished goods price index also increased. The year-over-year finished goods and raw materials price indexes both moved higher. The future raw materials price index inched upward from 77 to 78, and the future finished goods price index increased after falling for two straight months, indicating slightly more firms plan to pass recent cost increases through to customers.
Posted: September 29, 2011 Thursday 11:00 AM