Research >> Economics
Kansas City Fed Manufacturing activity increased
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Growth in Tenth District manufacturing activity increased in November, and producers remained optimistic about future activity. Price indexes in the survey continued to edge higher, particularly for raw materials.
The net percentage of firms reporting month-over-month increases in production in November was 21, up from 10 in October and 14 in September. The increase in production occurred among both durable and nondurable goods producing plants, with a sharp rise in machinery, high-tech, printing, and transportation equipment activity partly due to higher export orders. All other month-over-month indicators also improved from the previous month. The shipments, new orders, and order backlog indexes climbed higher, and the employment index reached its highest level since late 2007. The new orders for exports index rose from 0 to 11, and both inventory indexes moved into positive territory.
Year-over-year factory indexes also improved in November. The production index increased from 7 to 27, and the shipments, new orders, and order backlog indexes also edged higher. The employment index moved into positive territory for the first time since early 2008, and the capital expenditures index jumped from 0 to 9. Both inventory indexes rose to 0, after nearly two years of negative readings.
Future factory activity was somewhat mixed, but levels still remained solid for most indexes. The future production index eased from 29 to 23, and the future shipments and new order indexes also fell modestly. In contrast, the future employment index rose from 7 to 13, and the future capital expenditures index rebounded after falling last month. The future new orders for exports and supplier delivery time indexes remained basically unchanged. The raw materials inventory index increased from -5 to -1, and the finished goods inventory index also improved from -16 to -5.
Most price indexes continued to rise. The month-over-month finished goods price moved up only slightly from 2 to 3, and the raw materials price index increased from 25 to 35. The year-over-year finished goods price index dropped from 18 to 15, but the raw materials price index climbed higher for the second straight month. The future raw materials price index jumped from 47 to 61, and the future finished goods price index also increased, as slightly more firms plan to pass recent cost increases through to customers.
Posted: November 24, 2010 Wednesday 11:00 AM