Of the three regional manufacturing surveys released to date for December, two show manufacturing softer this month – and this Kansas City Fed Survey which improved.
The market was expecting a range between -6 to 9 (consensus 8) versus the actual at 8.
TENTH DISTRICT MANUFACTURING ACTIVITY EXPANDED AT A MODERATE PACE
The Federal Reserve Bank of Kansas City released the December 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 continued to expand at a moderate pace in December, and producers’ expectations for future activity remained at solid levels.
“This month’s results are similar to what we’ve seen most of the year, said Wilkerson. The main change in December, which we started to see in November, is that input price pressures have come down.”
TENTH DISTRICT MANUFACTURING SUMMARY
Tenth District manufacturing activity continued to expand at a moderate pace in December, and producers’ expectations for future activity remained at solid levels. Most price indexes grew at a slower pace, especially materials prices.
The month-over-month composite index was 8 in December, up slightly from 7 in November and 4 in October (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 slight increase in activity was mostly attributed to durable goods producers, particularly for electronics, aircraft, and machinery products, while nondurable goods production remained sluggish. Most other month-over-month indexes were also slightly higher than last month. The production and employment indexes were unchanged, but the shipments, new orders, and order backlog indexes increased markedly. However, the new orders for exports index fell from 8 to 0. The finished goods inventory index rose for the second straight month, while the raw materials inventory index eased somewhat.
Year-over-year factory indexes were mixed. The composite year-over-year index edged up from 9 to 11, and the shipments, new orders, and new orders for exports indexes also increased. The employment index jumped from 10 to 18, its highest level in nearly two years. In contrast, the production index eased from 15 to 11, and the order backlog and capital expenditures indexes also decreased. Both inventory indexes increased after two months of decline.
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.