The Kansas City Fed Manufacturing Survey revealed regional activity declined modestly in April, with the composite index at -4. This marks the 20th consecutive month the index has been negative. Future expectations stayed positive, though they eased from 10 in March to 6 in April.
Here is an excerpt from the latest report:
The month-over-month composite index was -4 in April, down from -2 in March and up from -5 in February. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The nondurable manufacturing sector continued to drive the declines, particularly food and print manufacturing. Most month-over-month indexes were negative, but a few improved from last month’s readings. The production index ticked down from 1 to -5 while the new orders index was mostly unchanged. Most year-over-year indexes were negative, with the exception of the supplier delivery time and inventory indexes. The capital expenditures index fell into negative territory after increasing slightly last month. The future composite index eased from 10 to 6 in April as expectations for production, shipments, and new orders all decreased.
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.
