Kansas City Fed survey suggests inflationary pressure in March
Respondents to the Federal Reserve Bank of Kansas City's monthly manufacturing survey reported high input and selling prices, suggesting growing inflation, while respondents voiced concern about tariffs.
Manufacturing activity posted "solid” gains in March, according to the survey, released Thursday.
"Factory activity continued to grow steadily in March," said Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City. “Firms continued to report high input and selling prices and many are concerned about higher steel and aluminum tariffs.”
The composite index remained at 17 in March, while the production index dipped to 20 from 21, volume of shipments dropped to 12 from 24, the volume of new orders index slumped to negative 1 from positive 16, and the backlog of orders index crept to 14 from 13. The new orders for exports index fell to 1 from 2 and the supplier delivery time index soared to 30 from 16.
The number of employees index gained to 26 from 23, while the average employee workweek index grew to 15 from 11. The prices received for finished product index slid to 24 from 26, while the prices paid for raw materials index rose to 55 from 50.
As for the inventories indexes, materials increased to 11 from 8, while the finished goods rose to 9 from 4.
In projections for six months from now, the composite index fell to 33 from 38, and the production index dropped to 42 from 56. The shipments declined to 42 from 49, while new orders decreased to 42 from 49, and the backlog of orders index dipped to 30 from 32. The new orders for exports index slid to 14 from 16, and the supplier delivery time index climbed to 23 from 18.
The number of employees index was at 36, off from 41 last month, while the average employee workweek index dropped to 17 from 25. The prices received for finished product index decreased to 48 from 53, and the prices paid for raw materials inched down to 72 from 73. The capital expenditures index was at 37, after a 36 reading the prior month.
As for the inventories indexes, materials fell to 21 from 23, while the finished goods index increased to 15 from 11.
The Tenth Federal Reserve District includes Kansas, Colorado, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri.