November 2016 Kansas City Fed Manufacturing Declines But Remains In Expansion

Of the three regional manufacturing surveys released for November, all are in expansion..

There were no market expectations reported from Bloomberg – and the reported value was +6. Any value below zero is contraction.

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The Federal Reserve Bank of Kansas City released the November 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 slightly.

“Factory activity in our region rose for the third straight month in November, following a year and a half of near constant declines,” said Wilkerson. “Firms also remained optimistic about future activity.”

TENTH DISTRICT MANUFACTURING SUMMARY

Tenth District manufacturing activity expanded slightly, and producers’ expectations for future activity remained solid. Price indexes increased moderately in November.

The month-over-month composite index was 1 in November, down from 6 in October and September. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Durable goods production continued to grow modestly, while nondurable goods activity fell moderately, particularly for food and plastics products.

Most month-over-month indexes slowed somewhat in November. The production index decreased from 18 to 9, and the shipments, new orders, and order backlog indexes also dropped. The employment index eased from 7 to 1, still the second highest reading in over a year. The finished goods inventory index fell from -9 to -13, while the raw materials inventory index was unchanged. Most year-over-year factory indexes remained below zero. The composite year-over-year index was basically unchanged at -10, while the production, new orders, and order backlog indexes fell further into negative territory. The shipments index was unchanged, while the employment index inched higher from -14 to -11. The capital expenditures index improved somewhat from -7 to -1, while the new orders for exports index remained generally stable. The raw materials inventory index increased from -19 to -15, and the finished goods inventory index also moved higher.

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 Fed survey (light 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.

Steven Hansen

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