Of the four regional surveys released to date for March, three show manufacturing expansion.
GROWTH IN TENTH DISTRICT MANUFACTURING ACTIVITY INCREASED
The Federal Reserve Bank of Kansas City released the March 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 increased, and producers’ expectations were mostly stable at solid levels.
“We saw acceleration in regional factory activity in March, to the fastest pace in over two years”, said Wilkerson. “However, several respondents noted the stronger growth was in part making up for weather-related softness in previous months.”
TENTH DISTRICT MANUFACTURING SUMMARY
Growth in Tenth District manufacturing activity increased in March, and producers’ expectations were mostly stable at solid levels. Some contacts attributed improved activity to better weather conditions. Many firms cited difficulties finding qualified workers with some additional pressure on wages. Most price indexes were stable or slightly higher.
The month-over-month composite index was 10 in March, up from 4 in February and 5 in January (Tables 1 & 2, Chart). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Manufacturing activity increased at both durable and non-durable goods-producing plants, particularly for plastic and machinery products. Other month-over-month indexes also improved. The production index jumped from 3 to 22, its highest level in 3 years, and the shipments and new orders indexes also climbed higher. The order backlog index edged up from -4 to -1, and the new orders for exports index also increased slightly. The employment index moderated from 3 to 0, and both inventory indexes eased somewhat.
Most year-over-year factory indexes were relatively unchanged from last month. The composite year-over-year index remained stable at 8, while the production, shipments, and order backlog indexes inched higher. The new orders, employment, and capital expenditures indexes were mostly unchanged. The new orders for exports index fell back into negative territory, while both inventory indexes posted levels similar to last month.
Future factory indexes were generally little changed and solid overall. The future composite index was stable at 11, while the future production, shipments, and new orders indexes edged higher. The future order backlog and employment indexes moderated slightly, and the future new orders for exports index also eased somewhat. The future capital expenditures index dropped from 24 to 9, its lowest level in over a year. The future finished goods inventory index moved into negative territory, and the future raw materials inventory index fell from -1 to -8.
Most price indexes increased slightly in March. The month-over-month finished goods price index edged up from 7 to 10, while the raw materials price index was unchanged. The year-over-year raw materials index jumped from 37 to 57, and the finished goods price index rose modestly. The future raw materials price index inched higher from 35 to 38, while the future finished goods price index moderated 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):
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.