Manufacturing activity in the Federal Reserve Bank of Kansas City's region "improved considerably to its highest growth rate in over two years" in December, according to the bank's monthly manufacturing survey, released Thursday.
"This was the highest composite reading in our survey since May 2014," said Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City. "This is now four straight months of factory expansion in our region, following a difficult time for many plants in 2015 and much of 2016."
The composite index rose to 11 in December from 1 in November, while the production index grew to 24 from 9, volume of shipments climbed to 16 from 7, the volume of new orders index gained to 11 from 6, and the backlog of orders index reversed to positive 7 from negative 2. The new orders for exports index slid to negative 2 from zero and the supplier delivery time index increased to 8 from zero.
The number of employees index soared to 10 from 1, while the average employee workweek index jumped to positive 6 from negative 8. The prices received for finished product index widened to negative 13 from negative 2, while the prices paid for raw materials index increased to 29 from 16.
As for the inventories indexes, materials rose to positive 4 from negative 11, while the finished goods gained to positive 1 from negative 13.
In projections for six months from now, the composite index grew to 19 from 12, and the production index increased to 33 from 24. The shipments index rose to 30 from 23, while new orders gained to 33 from 27, and the backlog of orders index soared to 26 from 10. The new orders for exports index slid to 3 from 6, and the supplier delivery time index climbed to 6 from 4.
The number of employees index was at 13, up from 5, while the average employee workweek index increased to 15 from 6. The prices received for finished product index climbed to 24 from 11, and the prices paid for raw materials rose to 40 from 25. The capital expenditures index was at 14, after a 19 reading the prior month.
As for the inventories indexes, materials grew to 7 from 2, while the finished goods index reversed to positive 6 from negative 3.
The Tenth Federal Reserve District includes Kansas, Colorado, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri.
