Kansas City Fed: Manufacturing Growth at a Slower Pace in April 2014

April 24th, 2014
in econ_news, syndication

Of the four regional surveys released to date for April, all show manufacturing expansion.

Follow up:


The Federal Reserve Bank of Kansas City released the April Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that growth in Tenth District manufacturing activity moderated slightly after rising to a two-year high in March, but producers’ expectations for future factory activity climbed higher.

“Regional factory expansion was not quite as strong in April as in March, when better weather provided a boost”, said Wilkerson. “But April’s numbers were otherwise the best in nearly two years, and firms were generally optimistic.”


Growth in Tenth District manufacturing activity moderated slightly in April after rising to a two-year high in March, but producers’ expectations for future activity climbed higher. Most price indexes increased slightly, particularly for expected raw materials and selling prices.

The month-over-month composite index was 7 in April, down from 10 in March but up from 4 in February. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Manufacturing activity grew slower at most durable and non-durable goods-producing plants, with the exception of metal and chemical products. Other month-over-month indexes were mixed. The production index dropped from 22 to 12, and the shipments and new orders indexes also eased. In contrast, the order backlog index moved into positive territory for the first time in four months, and the employment index rebounded after falling last month. The raw materials inventory index decreased from 8 to -1, while the finished goods inventory index was unchanged.

Most year-over-year factory indexes improved slightly over last month. The composite year-over-year index edged up from 12 to 14, and the production, new orders, and order backlog indexes also increased. The employment index remained at the same level for the past four months, while the shipments index slipped from 24 to 19. The capital expenditures index fell from 20 to 14, its lowest level in six months, and the new orders for exports index also moderated slightly. Both inventory indexes moved higher after falling last month.

Future factory indexes increased further in April. The future composite index jumped from 11 to 21, and the future production, shipments, and new orders indexes also rose. The future order backlog index climbed from 9 to 20, and the future new orders for exports index also edged higher. The future employment and capital expenditures indexes rebounded strongly after reaching year-long lows in March. The future finished goods inventory index rose from 0 to 5, and the future raw materials inventory index moved into positive territory.

Most price indexes increased in April. The raw materials price index edged higher, but the month-over-month finished goods price index fell from 10 to 2. The year-over-year raw materials index inched up from 57 to 59, while the finished goods price index moderated somewhat. The future raw materials price index rose from 38 to 46, and the future finished goods price index also increased, indicating more firms plan to pass recent cost increases through to customers.

Summary of all Federal Reserve Districts Manufacturing:

Richmond Fed (hyperlink to reports):

/images/z richmond_man.PNG

Kansas Fed (hyperlink to reports):

/images/z kansas_man.PNG

Dallas Fed (hyperlink to reports):

/images/z dallas_man.PNG

Philly Fed (hyperlink to reports):

/images/z philly fed1.PNG

New York Fed (hyperlink to reports):

/images/z empire1.PNG

Federal Reserve Industrial Production - Actual Data (hyperlink to report)


Holding this and other survey's Econintersect follows accountable for their predictions, the following graph compares the hard data from Industrial Products manufacturing subindex (dark blue bar) and US Census manufacturing shipments (lighter blue bar) to the Kansas City Survey (pea-green bar).

Comparing Surveys to Hard Data

/images/z survey1.png

In the above graphic, hard data is the long bars, and surveys are the short bars. The arrows on the left side are the key to growth or contraction.

Steven Hansen


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