Kansas City Fed Manufacturing Survey: Growth Slips

Manufacturing activity in the Federal Reserve Bank of Kansas City's region " fell slightly in December, but producers' expectations for future activity improved modestly," according to the bank's monthly manufacturing survey, released Friday.

"The drop in regional factory activity appears like it will be temporary, and was at least partly driven by bad weather," said Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City. "Firms remain generally optimistic about the first half of 2014, despite continued uncertainty about fiscal policy and regulations."

The composite index dropped to negative 3 in December from positive 7 in November, while the production index declined to negative 17 from positive 11, volume of shipments fell to negative 14 from positive 3, and the volume of new orders index slid to zero from 15, and the backlog of orders index slumped to negative 6 from positive 14. The new orders for exports index dipped to negative 6 from negative 4, and the supplier delivery time index held at negative 2.

The number of employees index slipped to 2 from 6, while the average employee workweek index fell to negative 2 from positive 5. The prices received for finished product index dipped to 4 from 9, while the prices paid for raw materials index increased to 21 from 17.

As for the inventories indexes, materials dropped to negative 1 from positive 4, while the finished goods rose to positive 1 from negative 2.

In projections for six months from now, the composite index grew to 14 from 12, and the production index increased to 29 from 21. The shipments climbed to 30 from 27, while new orders gained to 22 from 16, and the backlog of orders index rose to 8 from 7. The new orders for exports index slipped to 1 from 9, and the supplier delivery time index increased to 6 from 2.

The number of employees index was at 14, off from 20, while the average employee workweek index dipped to 10 from 11. The prices received for finished product index grew to 22 from 18, and the prices paid for raw materials rose to 37 from 31. The capital expenditures index was at 10, off from 16 the prior month.

As for the inventories indexes, materials slipped to zero from 2, while the finished goods index fell to negative 6 from negative 3.

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

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