April 2018 Kansas City Fed Manufacturing Matching Highest Level in Survey History

Of the four regional manufacturing surveys released for April, 3 were in expansion and one was in contraction.

There were no market expectations from Bloomberg / Econoday. The reported value was 26. Any value below zero is contraction.

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The Federal Reserve Bank of Kansas City released the April 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 more rapidly in April, and optimism remained high for future activity. “Factory activity accelerated in April despite concerns among many firms about changes in international trade policy,” said Wilkerson. “Price indexes also continued to rise.”

Tenth District manufacturing activity expanded more rapidly in April, with the composite index matching its highest level in survey history, and optimism remained high for future activity. Selling price indexes increased further, while raw material price indexes remained at high levels. The month-over-month composite index was 26 in April, up from readings of 17 in March and 17 in February (Tables 1 & 2, Chart 1). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Factory activity accelerated at both durable and nondurable goods plants, particularly for machinery, plastics, and chemicals. Month-over-month indexes increased considerably. The production index jumped from 20 to 33, and the shipments, new orders, and order backlog indexes also rose. The employment and new orders for exports indexes were unchanged. The raw materials inventory index increased from 11 to 17, while the finished goods inventory index fell slightly. Year-over-year factory indexes were mixed but showed little change overall. The composite index was basically unchanged at 36, while the production, shipments, and new orders indexes eased slightly. The employment index inched lower from 37 to 35, while the order backlog and capital expenditures indexes increased moderately. The raw materials inventory index edged higher from 30 to 32, while the finished goods inventory index decreased.

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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