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posted on 22 January 2015

Kansas City Fed: Manufacturing Growth Weakens in January 2015

Of the three regional manufacturing surveys released to date for January, all show manufacturing growth this month.

The market was expecting a range between -6 to 9 (consensus 8) versus the actual at 3.


The Federal Reserve Bank of Kansas City released the January Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity expanded at a slower pace, but producers’ expectations for future activity remained at solid levels.

“We saw weaker activity in some energy sector-related manufacturing in January, and that pulled the overall index down somewhat”, said Wilkerson. “But firms still reported modest overall growth in regional factory activity


Tenth District manufacturing activity expanded at a slower pace in January, but producers’ expectations for future activity remained at solid levels. Most price indexes were lower than last month, especially for finished goods prices.

The month-over-month composite index was 3 in January, down from 8 in December and 6 in November. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The overall slower growth was mostly attributable to declines in some types of durable goods production, particularly electronics, machinery, and metal products, some of which is likely due to lower energy activity. Looking across District states, the weakest activity was in energy-dependent Oklahoma. In contrast, nondurable goods producers reported a slight increase in production, especially for food and plastics products. Most other month-over-month indexes were also down compared to last month. The production, shipments, and new orders indexes moved into negative territory for the first time in over a year, and the employment index posted a five-month low. The order backlog index plunged from 5 to -20, and the new orders for exports index decreased from 0 to -7. The finished goods inventory index continued to rise somewhat, and the raw materials inventory index moved up from 7 to 12

Year-over-year factory indexes were lower than the previous month. The composite year-over-year index edged down from 11 to 9, and the production, new orders, shipments, and order backlog indexes all posted their lowest levels in over a year. The employment index moderated from 18 to 11, and the capital expenditures index eased further. The new orders for exports index fell into negative territory, while both inventory indexes increased slightly.

Summary of all Federal Reserve Districts Manufacturing:

Richmond Fed (hyperlink to reports):

z richmond_man.PNG

Kansas Fed (hyperlink to reports):

z kansas_man.PNG

Dallas Fed (hyperlink to reports):

z dallas_man.PNG

Philly Fed (hyperlink to reports):

z philly fed1.PNG

New York Fed (hyperlink to reports):

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

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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