Respondents to the Federal Reserve Bank of Kansas City's monthly manufacturing survey reported gains in input and selling prices, suggesting growing inflation.
Manufacturing activity posted "solid growth" in February, according to the survey, released Thursday.
"February was another good month for factories in our region," said Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City. “A rising number of firms reported higher input and selling prices.”
The composite index gained to 17 in February from 16 in January, while the production index rose to 21 from 16, volume of shipments soared to 24 from 14, the volume of new orders index climbed to 16 from 14, and the backlog of orders index slid to 13 from 20. The new orders for exports index dropped to 2 from 6 and the supplier delivery time index declined to 16 from 18.
The number of employees index gained to 23 from 18, while the average employee workweek index grew to 11 from 2. The prices received for finished product index climbed to 26 from 21, while the prices paid for raw materials index surged to 50 from 34.
As for the inventories indexes, materials decreased to 8 from 15, while the finished goods inched up to 4 from 3.
In projections for six months from now, the composite index rose to 38 from 29, and the production index grew to 56 from 37. The shipments gained to 49 from 32, while new orders increased to 49 from 36, and the backlog of orders index rose to 32 from 30. The new orders for exports index slid to 16 from 19, and the supplier delivery time index dropped to 18 from 25.
The number of employees index was at 41, up from 33 last month, while the average employee workweek index crept to 25 from 23. The prices received for finished product index increased to 53 from 44, and the prices paid for raw materials soared to 73 from 58. The capital expenditures index was at 36, after a 38 reading the prior month.
As for the inventories indexes, materials rose to 23 from 15, while the finished goods index decreased to 11 from 19.
The Tenth Federal Reserve District includes Kansas, Colorado, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri.