Of the five regional manufacturing surveys released to date for August, all show manufacturing expansion.
The market was expecting a range between 7 to 11 (consensus 9) versus the actual at 3.
GROWTH IN TENTH DISTRICT MANUFACTURING ACTIVITY SLOWED SLIGHTLY
The Federal Reserve Bank of Kansas City released the August 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 slowed slightly, but producers’ expectations for future activity remained solid.
“Growth eased a bit from last month’s pace,” Wilkerson said. “Still, August represented the eighth straight month of expansion in the region, and plant managers remained generally optimistic.”
TENTH DISTRICT MANUFACTURING SUMMARY
Growth in Tenth District manufacturing activity slowed slightly in August, but producers’ expectations for future activity remained solid. Price indexes indicated little change from the previous month, but expectations for future growth were slightly lower.
The month-over-month composite index was 3 in August, down from 9 in July and 6 in June (Tables 1 & 2, Chart). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The overall slowing in manufacturing activity occurred at nondurable goods producers, while durable goods production increased somewhat. Most month-over-month indexes fell compared to July’s readings. The production index fell from 11 to 4, and the shipments and new orders indexes also declined but remained above zero. The employment index was -4, the first negative result in 10 months, while the order backlog index remained relatively steady at -5. The inventory indexes were mixed, with materials slightly lower and finished goods considerably higher than in July.
Year-over-year factory indexes were mostly lower. The composite year-over-year index was unchanged at 13, while production index dropped from 24 to 8, its lowest level in seven months. The shipments, new orders, and order backlog indexes also fell. In contrast, the capital expenditures index rose from 10 to 14, after falling last month. The raw materials and finished good inventory indexes both increased considerably over last month.
Future factory indexes were mixed in August. The future composite index edged up from 15 to 17, and the future production, new orders, and order backlog indexes also rose. The future new orders for exports index increased to its highest level in seven months, while the future shipments index decreased from 28 to 20. The future employment index fell moderately, from 23 to 15, and the future capital expenditures index also declined. Both future inventories indexes increased moderately after being in negative territory last month.
Summary of all Federal Reserve Districts Manufacturing:
Richmond Fed (hyperlink to reports):
Kansas Fed (hyperlink to reports):
Dallas Fed (hyperlink to reports):
Philly Fed (hyperlink to reports):
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New York Fed (hyperlink to reports):
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
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.