Kansas City Fed Manufacturing Survey: Moderate Growth

Manufacturing activity in the Federal Reserve Bank of Kansas City's region "expanded again at a moderate pace" in October, according to the bank's monthly manufacturing survey, released Thursday.

"This was the second consecutive month of rising factory activity in the Tenth District, the first time that has happened in nearly two years," said Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City. "Much of the improvement recently has been in machinery and fabricated metals manufacturing."

The composite index remained at 6 in October from 6 in September, while the production index gained to 18 from 15, volume of shipments grew to 20 from 16, the volume of new orders index climbed to 14 from 12, and the backlog of orders index rose to 4 from zero. The new orders for exports index increased to positive 3 from negative 4 and the supplier delivery time index reversed to positive 3 from negative 3.

The number of employees index gained to positive 7 from negative 3, while the average employee workweek index climbed to 8 from 5. The prices received for finished product index narrowed to negative 5 from negative 7, while the prices paid for raw materials index slipped to zero from 2.

As for the inventories indexes, materials decreased to negative 11 from positive 8, while the finished goods dropped to negative 9 from zero.

In projections for six months from now, the composite index rose to 18 from 10, and the production index soared to 32 from 15. The shipments index increased to 32 from 17, while new orders fell to 16 from 24, and the backlog of orders index dropped to 5 from 11. The new orders for exports index slid to 1 from 6, and the supplier delivery time index crept to 6 from 5.

The number of employees index was at 21, up from 14, while the average employee workweek index decreased to 4 from 7. The prices received for finished product index inched up to 8 from 7, and the prices paid for raw materials declined to 19 from 26. The capital expenditures index was at 8, after a 14 reading the prior month.

As for the inventories indexes, materials surged to positive 13 from negative 7, while the finished goods index gained to positive 7 from negative 5.

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

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