The latest Kansas City Fed Manufacturing Survey composite index was unchanged in August and the future outlook rose slightly. The composite index came in at 0, up from -11 in July, while the future outlook increased to 2 from -2 last month. All figures are seasonally adjusted.
Here is an excerpt from the latest report:
Factory Activity Was Unchanged
Tenth District manufacturing activity was unchanged in August, and expectations for future activity rose slightly (Chart 1, Tables 1 & 2). District firms’ finished product prices continued to decline on a monthly basis even as raw materials prices increased. Firms continue to expect input and output price increases in the next six months.
The month-over-month composite index was 0 in August, up from -11 in July and -12 in June (Tables 1 & 2). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The change from last month was primarily driven by increases in printing, wood production, and furniture manufacturing. The month-over-month indexes were mixed, but all increased from previous readings except the number of employees which cooled slightly and new orders for exports which declined further. The production and volume of shipments indexes increased significantly, while the materials inventory index continued to decrease as finished goods inventories picked up. Factory activity decreased further on a year-over-year basis. The composite index decreased to -9 in August from -4 in July, but was up from -12 in June. Production stayed flat, while new orders and materials inventory fell and capital expenditures growth cooled. The future composite index increased to 2 in August from -2 in July, as firms expect production and new orders to grow somewhat in the next six months. [More...]
Background on 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.
