June 2021 Kansas City Fed Manufacturing Remains Strong

The four regional manufacturing surveys released to date for June are in expansion.

Market expectations from Econoday were 24 to 29 (consensus 29). The reported value was 27. Any value below zero is in contraction.

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Factory Activity Remained Strong

Tenth District manufacturing activity remained strong, and expectations for future activity increased to a survey record high (Chart 1, Tables 1 & 2). The index of prices paid for raw materials and prices received for finished goods compared with a month ago remained very high. Price indexes vs. a year ago posted record highs again in June. Moving forward, district firms expected materials prices and finished goods prices to continue to increase over the next six months.

The month-over-month composite index was 27 in June, similar to 26 in May, and slightly below 31 in April (Tables 1 & 2). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The growth in district manufacturing activity continued to be driven by durable goods plants, in particular primary and fabricated metals, machinery, computer and electronic products, furniture, and transportation equipment manufacturing. The month-over-month indexes for order backlog and employees grew modestly, and supplier delivery time increased. On the other hand, month-over-month indexes for production and shipments slowed slightly from record levels a few months ago. Year-over-year factory indexes expanded steadily in June, and the year-over-year composite index remained at 43. The future composite index increased from 33 to 37 in June, a new survey record high, as new orders and supplier delivery time rose.

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.

Steven Hansen

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