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Kansas City Fed Manufacturing Activity continued solid pace in March
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Tenth District manufacturing activity continued at a solid pace in March, and optimism remained high for future activity. In a special question on the effect of potential steel and aluminum tariffs, most contacts indicated some impact, with varying anticipated degrees of severity. Price indexes were little changed in March after considerable increases the past few months.
The month-over-month composite index was 17 in March, equal to 17 in February and higher than 16 in January. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Factory activity grew modestly at durable goods plants, particularly for machinery and aircraft, while production of nondurable goods moderated slightly. Month-over-month indexes were mixed. The shipments and new orders indexes decreased moderately, while the production, order backlog, and new orders for exports indexes where basically unchanged. In contrast, the employment index edged up from 23 to 26 and the supplier delivery time index jumped from 16 to 30, both at their highest levels in survey history. The raw materials inventory index increased from 8 to 11, and the finished goods inventory index also rose modestly.
Most year-over-year factory indexes were slightly lower in March. The composite index was basically unchanged at 37, while the production, shipments, new orders, and order backlog indexes decreased moderately. The employment index inched lower from 39 to 37, and the capital expenditures index also fell. The raw materials inventory index increased from 23 to 30, while the finished goods inventory index was generally stable.
Future factory activity expectations moderated slightly but were still solid overall. The future composite index slipped from 38 to 33, and the future production, shipments, new orders, and order backlog indexes also moderated slightly. The future employment index decreased from 41 to 36, while the future capital expenditures index was basically unchanged. The future raw materials inventory index edged down from 23 to 21, while the future finished goods inventory index increased modestly.
Most price indexes were little changed in March but remained at high levels. The month-over-month finished goods price index slipped from 26 to 24, while the raw materials price index increased slightly. The year-over-year finished goods price index inched lower from 51 to 49, while the year-over-year raw materials price index moved modestly higher. The future finished goods price index eased from 53 to 48, while the future raw materials price index was basically unchanged.
Posted: March 22, 2018 Thursday 11:00 AM