Respondents to the Federal Reserve Bank of Kansas City's monthly manufacturing survey reported strong activity and increased optimism in July, while labor shortages and tariffs remained issues.
"Our composite index came down slightly from record highs in recent months," said Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City. “Many firms remain concerned about labor availability and tariffs, but optimism is still high.”
The composite index dipped to 23 in July from 28 in June, while the production index slid to 22 from 38, volume of shipments fell to 12 from 39, the volume of new orders index dropped to 21 from 27, and the backlog of orders index declined to 9 from 10. The new orders for exports index held at 6 and the supplier delivery time index grew to 28 from 22.
The number of employees index rose to 26 from 24, while the average employee workweek index dropped to 14 from 25. The prices received for finished product index gained to 27 from 22, while the prices paid for raw materials index increased to 52 from 47.
As for the inventories indexes, materials fell to 17 from 27, while the finished goods slid to 11 from 16.
In projections for six months from now, the composite index dipped to 34 from 36, and the production index slid to 49 from 53. The shipments remained at 52, while new orders decreased to 37 from 42, and the backlog of orders index grew to 29 from 25. The new orders for exports index crept to 8 from 7, and the supplier delivery time index rose to 29 from 20.
The number of employees index was at 42, up from 37 last month, while the average employee workweek index slumped to 13 from 31. The prices received for finished product index increased to 43 from 40, and the prices paid for raw materials gained to 68 from 67. The capital expenditures index was at 38, up from 36 the prior month.
As for the inventories indexes, materials sank to 15 from 30, while the finished goods index declined to 7 from 23.
The Tenth Federal Reserve District includes Kansas, Colorado, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri.