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Kansas City Fed Manufacturing Activity continued to decline modestly in May
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Tenth District manufacturing activity continued to decline modestly, while producers’ expectations for future activity remained slightly positive. Most raw material price indexes rose moderately in May, but selling prices fell slightly.
The month-over-month composite index was -5 in May, which is largely unchanged from April and March readings. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Nondurable goods production slowed, particularly for food, chemical, and plastics production. On the other hand, durable goods production improved slightly but remained at low levels. Most month-over-month indexes were stable from the previous month. The production index fell from -8 to -11, while the shipments, news orders, employment and order backlog indexes were stable at low levels. The new orders for exports index decreased from -4 to -8. The raw materials inventory index eased from 0 to -3, while the finished goods inventory index was basically unchanged.
Year-over-year factory indexes were mixed, but generally remained weak. The composite year-over-year index was unchanged at -19, while the production, shipments, and order backlog indexes fell moderately. The new orders index improved slightly from -26 to -24, and the capital expenditures index also edged higher. The new orders for exports index moved up from -19 to -15, and both inventory indexes increased modestly.
Most future factory indexes slowed after improving considerably last month. The future composite index eased from 10 to 4, and the future production, shipments, and new orders indexes also slowed modestly. The future employment index fell from 8 to -4, its lowest level since September 2015. In contrast, the future capital expenditures index continued to climb higher, from -6 to -3. The future finished goods inventory index increased from -13 to -5, while the future raw materials inventory index was basically unchanged.
Price indexes were mixed in May. The month-over-month finished goods price index eased from -6 to -8, while the raw materials price index jumped from 4 to 13. The year-over-year finished goods price index fell from -1 to -4, while the raw materials price index moved higher. The future finished goods price index decreased slightly from 2 to -1, while the future raw materials price index was unchanged.
Posted: May 26, 2016 Thursday 11:00 AM