Kansas City Fed Mfg Survey: Activity Slips

Manufacturing activity in the Federal Reserve Bank of Kansas City's region "fell modestly, although producers'expectations for future activity continued to increase," according to the bank's monthly manufacturing survey, released Thursday.

"We were a bit discouraged to see factory activity decline in June after it expanded slightly in May," said Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, "But quite a few contacts lost production or had shipments delayed due to regional storms and flooding, so the downturn appears like it may be temporary."

The composite index slid to negative 5 in June from positive 2 in May, while the production index dropped to negative 17 from positive 5, volume of shipments slumped to negative 16 from positive 8, and the volume of new orders index sank to negative 10 from positive 6, and the backlog of orders index narrowed to negative 4 from negative 8. The new orders for exports index improved to negative 5 from negative 6, and the supplier delivery time index slipped to 2 from 5.

The number of employees index gained to negative 1 from negative 7, while the average employee workweek index dipped to negative 13 from negative 8. The prices received for finished product index reversed to positive 3 from negative 3, while the prices paid for raw materials index increased to 14 from 9.

As for the inventories indexes, materials gained to 4 from zero, while the finished goods rose to positive 6 from negative 2.

In projections for six months from now, the composite index gained to 12 from 11, and the production index climbed to 24 from 16. The shipments rose to 26 from 21, while new orders increased to 26 from 18, and the backlog of orders index rose to 14 from 9. The new orders for exports index gained to 13 from 3, and the supplier delivery time index decreased to 4 from 13.

The number of employees index dipped to 7 from 8, while the average employee workweek index held at 1. The prices received for finished product index slid to 21 from 23, and the prices paid for raw materials grew to 46 from 43. The capital expenditures index was at 16, down from 19 the prior month.

As for the inventories indexes, materials decreased to negative 2 from positive 1, while the finished goods index rose to 3 from zero.

The Tenth Federal Reserve District includes Kansas, Colorado, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri.

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