Research >> Economics
Kansas City Fed Manufacturing activity moderated somewhat
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Growth in Tenth District manufacturing activity moderated somewhat in January, but activity was stronger than a year ago and optimism remained fairly high. Price indexes in the survey were still elevated, particularly for raw materials.
The month-over-month composite index was 7 in January, down from 14 in December and 11 in November. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Growth in activity eased at both durable and non-durable goods producing plants. Most other month-over-month indicators also declined slightly in January but remained positive. The production index dropped from 21 to 11, and the shipments, new orders, and order backlog indexes also fell. The employment index edged down from 11 to 8, while the supplier delivery time index increased and the new orders for exports index remained unchanged. Both inventory indexes fell slightly this month, but were still in positive territory.
Factory activity remained well above year-ago levels. The composite year-over-year index inched higher from 20 to 23, and the new orders and order backlog indexes also improved. The employment index recorded a four-year high, while the production and shipments indexes softened slightly. The capital expenditures index dropped from 19 to 2, after three straight months of increases. Both inventory indexes rose to their highest levels in nearly three years.
Future factory indexes fell modestly, but remained at solid levels. The future composite index eased from 21 to 20, and the future production, shipments, new orders, and order backlog indexes also decreased. The future employment index edged down slightly after reaching a five-year high in December. The future capital expenditures index eased from 21 to 17, and the future new orders for exports index also fell somewhat. The future raw materials inventory index reached its highest level in over five years, and the future finished goods inventory index moved into positive territory.
Price indexes were mixed in January. The month-over-month raw materials price index continued to climb, while the finished goods price index eased slightly from 16 to 11. The year-over-year raw materials price index increased from 68 to 73, while the finished goods price index was basically unchanged. The future raw materials price index edged down from 76 to 71, and the future finished goods price index also fell, as slightly fewer firms plan to pass recent cost increases through to customers.
Posted: January 27, 2011 Thursday 11:00 AM