Kansas City Fed Manufacturing Survey: Activity Stayed Flat

This article was originally written by Jill Mislinski. Starting in January 2023, AP Charts pages will be maintained by Jennifer Nash at Advisor Perspectives/VettaFi.

The latest Kansas City Fed Manufacturing Survey composite index came in at 0, unchanged from last month's figure. The future outlook came in at 3, up 2 from last month. All figures are seasonally adjusted.

Here is an excerpt from the latest report:

Tenth District manufacturing activity remained essentially flat for the third month in a row, and expectations for future activity increased slightly (Chart 1, Tables 1 & 2). Monthly price indexes were mixed with an increase in materials prices but a slight decrease in finished goods prices. Expectations for future raw materials and finished goods prices remained similar to last month.

The month-over-month composite index was 0 in March, unchanged from 0 in February, and up slightly from -1 in January (Tables 1 & 2). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Nondurable goods plants reported decreased activity in March, especially printing, plastics, and chemical manufacturing, while food manufacturing increased. Month-over-month indexes continued to remain flat. Indexes for new orders, supplier delivery time, and materials inventories declined, while production, volume of shipments, and finished goods inventories increased slightly. Year-over-year factory indexes increased slightly, from a composite index of 5 to 6. The future composite index increased from 1 to 3 in March, with volume of new orders and capital expenditures indexes moving into positive territory. [More...]

Background on the Kansas City Fed Manufacturing Survey

The Kansas City Fed Manufacturing Survey is a monthly survey of ~300 manufacturing plants that provides information on current manufacturing activity and future expectations in the tenth district (Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico, and western Missouri). The composite manufacturing index is an average of indexes on production, new orders, employment, delivery time, and raw materials inventory. This is a diffusion index, meaning negative readings indicate contraction while positive ones indicate expansion. The survey offers clues on inflationary pressures and the pace of growth in the manufacturing sector for this region of the country and the accumulated results can help trace long-term trends.