July 2021 Kansas City Fed Manufacturing Increased Further

The three regional manufacturing surveys released to date for July are in expansion.

Market expectations from Econoday were —————– (consensus —–). The reported value was 30. Any value below zero is in contraction.

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Factory Activity Increased Further

Tenth District manufacturing activity increased further, with solid expectations for future activity over the next six months (Chart 1, Tables 1 & 2). The index of prices paid for raw materials remained near record highs and the index of prices received for finished goods expanded again in July. Price indexes vs. a year ago posted record highs in July for the fourth straight month. In July, more district firms expected materials prices and finished goods prices to rise over the next six months.

The month-over-month composite index was 30 in July, up from 27 in June and 26 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 growth in district manufacturing activity continued to be driven by increased activity at durable goods plants, especially primary and fabricated metals, computer and electronic products, transportation equipment, and furniture manufacturing. The month-over-month indexes for shipments, new orders, order backlog, and new orders for exports rose at a faster pace in July, and supplier delivery time increased. Inventories remained positive but eased slightly from last month. Year-over-year factory indexes continued to increase in July, and the year-over-year composite index expanded from 43 to 50. The future composite index edged down from the record high 37 in June to 33 in July, still indicating solid expectations over the next six months.

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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