May 2019 Kansas City Fed Manufacturing Little Changed

Of the three regional manufacturing surveys released for May, all were in expansion.

Market expectations from Econoday were 3 to 15 (consensus 6). The reported value was 4. Any value below zero is in contraction.

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The Federal Reserve Bank of Kansas City released the May 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 continued at a modest pace, and expectations for future activity remained generally solid.

“Regional factory growth was sluggish again in May,” said Wilkerson. “Several firms noted that new tariffs were disrupting activity.”

Tenth District manufacturing activity continued to grow at a modest pace in May, and expectations for future activity remained mostly solid (Chart 1). Price indexes showed little change, with most indexes lower than a year ago and some slight upward movement in future raw materials prices.

Factories Report Continued Modest Growth

The month-over-month composite index was 4 in May, similar to a reading of 5 in April but down from 10 in March (Table 1). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Growth continued to grow modestly at most durable and nondurable production plants, with stronger growth for food, plastics, and metals products. Most month-overmonth indexes slowed slightly in May but remained positive, with production, shipments, and new orders indexes all decreasing. In contrast, the employment index rebounded from 2 to 5, and both inventory indexes also increased. Most year-over-year factory indexes showed little change, with the composite index inching higher from 22 to 23. The future composite index also edged up, moving from 11 to 12, and most future factory activity indexes remained stable or moved slightly higher.

Summary of all Federal Reserve Districts Manufacturing:

Richmond 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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