Kansas City Fed says growth slows as tariff issues weigh on manufacturers
Respondents to the Federal Reserve Bank of Kansas City's monthly manufacturing survey reported slower growth in October, with tariffs causing supply issues.
"While regional factories reported another month of growth, a number of firms engaged in international trade noted negative effects of tariffs on supply chains," said Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City.
The composite index slipped to 8 in October from 13 in September, while the production index fell to 5 from 10, volume of shipments soared to 14 from 2, the volume of new orders index declined to 7 from 15, and the backlog of orders index increased to 6 from 4. The new orders for exports index rose to 3 from 1 and the supplier delivery time index slid to 8 from 18.
The number of employees index rebounded to 8 from 1, while the average employee workweek index rose to 4 from 3. The prices received for finished product index slid to 19 from 24, while the prices paid for raw materials index dropped to 33 from 45.
As for the inventories indexes, materials fell to 10 from 20, while the finished goods remained at 7.
In projections for six months from now, the composite index dipped to 21 from 27, and the production index slid to 37 from 38. The shipments held at 34, while new orders increased to 41 from 35, and the backlog of orders index climbed to 27 from 17. The new orders for exports index dropped to 8 from 15, and the supplier delivery time index fell to 11 from 18.
The number of employees index was at 15, off from 29 last month, while the average employee workweek index slipped to 7 from 14. The prices received for finished product index declined to 38 from 44, and the prices paid for raw materials slumped to 37 from 57. The capital expenditures index was at 14, off from 36 the prior month.
As for the inventories indexes, materials fell to 3 from 17, while the finished goods index reversed to negative 5 from positive 9.
The Tenth Federal Reserve District includes Kansas, Colorado, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri.