All four regional surveys released to date in October show expansion.
TENTH DISTRICT MANUFACTURING SURVEY IMPROVED MODERATELY
The Federal Reserve Bank of Kansas City released the October 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 improved moderately, while producers’ expectations for future activity eased somewhat but remained at solid levels.
“Although many firms in our District noted negative effects from the government shutdown in October, we were encouraged to see slightly faster growth in regional manufacturing than in September” said Wilkerson.Growth in Tenth District manufacturing activity improved moderately in October, while producers’ expectations for future activity eased somewhat but remained at solid levels. Several producers noted negative business impacts from the government shutdown, particularly related to delays in government inspections and approval processes, lack of data availability, and overall customer uncertainty. Price indexes were mixed, with a general increase in materials prices and little overall change in selling prices.
The month-over-month composite index was 6 in October, up from 2 in September but down from 8 in August. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The production index increased further at durable goods plants, while production of nondurable goods products fell, particularly for chemicals and plastics. Other month-over-month indexes posted mixed results. The production index jumped from 4 to 14, and the shipments and new orders for exports indexes also increased. In contrast, the order backlog index was unchanged, and the new orders and employment indexes eased for the second straight month. The raw materials inventory index rose from 0 to 12, and the finished goods inventory index also moved higher.The majority of year-over-year factory indexes fell in October. The composite year-over-year index edged down from 10 to 7, and the production, shipments, new orders, and order backlog indexes also decreased. The employment index fell after recording its highest level of the year in September, and the capital expenditures index eased from 16 to 7. Both inventory indexes decreased but remained positive.
Most future factory indexes eased somewhat after rising markedly last month. The future composite index fell from 18 to 8, and the future production, shipments, and new orders indexes also decreased. The future employment index moved from 14 to 3, its lowest level since January, while the future capital expenditures index was unchanged. The future raw materials inventory index was basically unchanged, while the future finished goods inventory index declined into negative territory.
Price indexes were mixed, although raw materials prices increased across all time periods. The month-over-month finished goods price index edged up from 4 to 10, and the raw materials price index also rose. The year-over-year raw materials price index increased from 38 to 48, while the finished goods price index moderated slightly. The future raw materials price index moved higher from 36 to 45, while the future finished goods price index eased somewhat, indicating fewer firms plan to pass recent cost increases through to customers.
Summary of all Federal Reserve Districts Manufacturing:
Richmond Fed (hyperlink to reports):
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Kansas Fed (hyperlink to reports):
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Dallas Fed (hyperlink to reports):
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Philly Fed (hyperlink to reports):
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New York Fed (hyperlink to reports):
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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
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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.
