Manufacturing activity in the Federal Reserve Bank of Kansas City's region " contracted modestly again in January, but factories' production expectations remained relatively optimistic for the months ahead," according to the bank's monthly manufacturing survey, released Thursday.
"Regional factory activity has now edged down for four straight months, as fiscal policy uncertainty continues to weigh on firms' plans," said Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City. "On the positive side, expectations for new orders rose quite a bit in January, but hiring and capital spending plans were only modestly positive."
The composite index widened to negative 2 in January from negative 1 in December, while the production index improved to negative 3 from negative 5, volume of shipments climbed to negative 3 from negative 4, and the volume of new orders index bounced to negative 2 from negative 5, and the backlog of orders index gained to negative 6 from negative 16. The new orders for exports index widened to negative 8 from negative 2, and the supplier delivery time index inched up to 4 from 3.
The number of employees index slipped to negative 8 from negative 1, while the average employee workweek index dipped to negative 8 from negative 7. The prices received for finished product index held at 7, while the prices paid for raw materials index decreased to 23 from 33.
As for the inventories indexes, materials slipped to negative 4 from positive 1, while the finished goods fell to negative 10 from zero.
In comparison to the same month a year ago, the composite index dipped to 1 from 7, the production index sank to negative 9 from negative 3. The shipments index fell to negative 4 from positive 5, while the volume of new orders slid to negative 7 from positive 2, and the backlog of orders index widened to negative 12 from negative 7. The new orders for exports index declined to negative 11 from negative 4, and the supplier delivery time index decreased to negative 1 from positive 9.
The number of employees index rose to 14 from 13, while the average employee workweek index fell to negative 11 from negative 8. The prices received for finished product index slid to 31 from 35 and the prices paid for raw materials dipped to 50 from 56. The capital expenditures index sank to negative 3 from positive 20.
As for the inventories indexes, materials slipped to 6 from 14, while the finished goods index dropped to zero from 17.
In projections for six months from now, the composite index stayed at 7, and the production index slid to 15 from 16. The shipments remained at 14, while new orders rose to 19 from 13, and the backlog of orders index fell to 2 from 3 The new orders for exports index rose to zero from negative 2, and the supplier delivery time index reversed to positive 1 from negative 5.
The number of employees index grew to 3 from 1, while the average employee workweek index climbed to positive 3 from negative 5. The prices received for finished product index slid to 26 from 29, and the prices paid for raw materials dropped to 47 from 63. The capital expenditures index was at 3, down from 7 the prior month.
As for the inventories indexes, materials stayed negative 3, while the finished goods index held at negative 2.
The Tenth Federal Reserve District includes Kansas, Colorado, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri.
