Kansas City Fed Manufacturing Activity Remained Steady in May
The latest Kansas City Fed Manufacturing Survey composite index came in at -1. This is an increase from last month's figure and better than the expected -5 reading. The future outlook came in at 2, down slightly from April. All figures are seasonally adjusted.
Here is an excerpt from the latest report:
Factory Activity Remained Mostly Steady
Tenth District manufacturing activity remained mostly steady in May, while expectations for future activity also stayed flat (Chart 1, Tables 1 & 2). Prices for raw materials have cooled significantly and prices for finished goods also eased somewhat over the last month and last year. Prices are expected to cool further in the next six months.
The month-over-month composite index was -1 in May, up from -10 in April and down from 0 in March. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The increase from last month was driven by both durable and non-durable goods, especially by paper, primary metal, and miscellaneous durable goods manufacturing. Month-over-month indexes were mixed. The production, volume of shipments, volume of new orders, number of employees, and finished goods inventories indexes all increased closer to their March levels after a significant decline in April. The average employee workweek and new orders indexes decreased slightly over the last month. All year-over-year indexes increased or stayed close to their April levels, with the exception of the price indexes which cooled. The future composite index was modestly positive, at 2. Most indexes of expectations for activity in six months remained similar to last month, except for increases in new orders and backlog of orders and cooling in the price indexes. [More...]
Kansas City Fed Manufacturing Survey Background
The Kansas City Fed Manufacturing Survey is a monthly survey of ~300 manufacturing plants that provides information on current manufacturing activity and future expectations in the tenth district (Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico, and western Missouri). The composite manufacturing index is an average of indexes on production, new orders, employment, delivery time, and raw materials inventory. This is a diffusion index, meaning negative readings indicate contraction while positive ones indicate expansion. The survey offers clues on inflationary pressures and the pace of growth in the manufacturing sector for this region of the country and the accumulated results can help trace long-term trends.