The four regional manufacturing surveys released to date for August are in expansion.
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 positive. This survey should be considered about the same as last month.
Market expectations from Econoday were 27 to 35 (consensus 30). The reported value was 29. Any value below zero is in contraction.
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Factory Activity Increased Further
Factory Activity Continued at a Strong Pace
Tenth District manufacturing activity continued at a strong pace, and expectations for future activity remained solid (Chart 1, Tables 1 & 2). The monthly index of prices paid for raw materials continued to increase for a majority of firms in August and the index of prices received for finished goods rose to a new survey high. Price indexes vs. a year ago expanded near record levels. Moving forward, district manufacturing firms expected materials prices and finished goods prices to continue to rise over the next six months.
The month-over-month composite index was 29 in August, similar to 30 in July, and up slightly from 27 in June (Tables 1 & 2). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Durable goods plants continued to drive the growth in district manufacturing activity, in particular primary metals, computer and electronic products, and transportation equipment while nondurable goods manufacturing remained steady. Month-over-month indexes remained positive, indicating expansion. The month-over-month indexes for new orders increased at a higher rate in August and there was an uptick for the supplier delivery time index. Materials inventories grew slightly, while finished goods inventories were largely unchanged. Year-over-year factory indexes expanded at an even pace in August with a year-over-year composite index of 50. The future composite index grew from 33 to 36 in August, near recent record high expectations.
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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