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Of the three regional manufacturing surveys released for July, all are in expansion.
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Analyst Opinion of Kansas City Fed Manufacturing
Kansas City Fed manufacturing has been one of the more stable districts. Note that the key internals were mixed. This survey should be considered about the same as last month.
Both new orders and backlog improved, with new orders in expansion and backlog remaining in contraction.
Market expectations from Econoday were -12 to +5 (consensus -8). The reported value was +3. Any value below zero is in contraction.
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The Federal Reserve Bank of Kansas City released the July 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 grow slightly after sharply decreasing in the spring. Activity still remained well below year-ago levels, while expectations for future activity continued to improve slightly.
“Regional factory activity continued to expand slightly in July, but was still well below year-ago levels,” said Wilkerson. “Of those surveyed, 44% of firms said that their business costs have increased in the past 6 months, but expectations for future activity and employment continued to improve.”
Factory Activity Continued to Grow Slightly in July
The month-over-month composite index was 3 in July, up slightly from 1 in June and up considerably from -19 in May (Tables 1 & 2). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The improvement in activity was still driven by non-durable goods plants. However, activity in most durable goods factories also improved except for continued decreases in fabricated metals and computer and electronics plants. Most month-over-month indexes were positive. Production, shipments, new orders, and supplier delivery time indexes remained positive, and indexes for order backlog and employment recovered to positive levels. Only new orders for exports and inventories indexes remained negative. Most year-over-year factory indexes increased but remained negative in July. The future composite index continued to rise in July, increasing slightly from 9 to 14.
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 (red 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.
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