Factory Activity in Central U.S. Grew Marginally in July -- Kansas City Fed
Factory Activity in Central U.S. Grew Marginally in July -- Kansas City Fed Factory activity in the central U.S. region expanded moderately in July and expectations for future activity rebounded somewhat, according to data from a survey by the Federal Reserve Bank of Kansas City released Thursday. "The pace of regional factory growth remained more moderate than earlier in the year," said Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City. The indicator gauges manufacturing activity of firms located in the western third of Missouri, all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming. "Monthly and annual survey price indexes fell to their lowest levels in over a year, and indexes for price expectations also moderated," the report said.
Published : 2 years ago by MarketScreener in Finance Markets
Factory activity in the central U.S. region expanded moderately in July and expectations for future activity rebounded somewhat, according to data from a survey by the Federal Reserve Bank of Kansas City released Thursday.
The Tenth District manufacturing survey's composite index increased to 13 in July from 12 in June. The indicator suggests factory activity grew modestly as a value greater than zero signals that activity expanded over the month.
The indicators beats expectations, as economists polled by The Wall Street Journal expected the indicator to come in at three.
"The pace of regional factory growth remained more moderate than earlier in the year," said Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City.
The slower pace in factory growth than earlier in the year was driven by decreases in activity in electrical equipment, electronic products, primary metal, chemical manufacturing and food manufacturing, the report said.
The indicator gauges manufacturing activity of firms located in the western third of Missouri, all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming.
The production index rose to 7 in July from minus one the previous month, suggesting an increase in output.
Demand indicators increased. The volume of shipments index rose to 9 from minus 3 in June, and the volume of new orders index went up to minus 2 from minus 8 the previous month.
The employment index fell to 17 in July from 18 in June, signaling that firms continued to expand their workforce but at a slower pace than the previous month.
Supply-side constraints showed further signs of easing. The backlogs of orders rose to 5 from minus 4 and the supplier delivery time index fell to 23 from 25.
Firms' costs and prices charged to customers eased sharply, according to the survey. The index of prices paid for raw materials fell to 41 from 71, and the index of prices received for finished products fell to 36 from 51.
"Monthly and annual survey price indexes fell to their lowest levels in over a year, and indexes for price expectations also moderated," the report said.
Optimism among firms in the area increased markedly, with the future composite index--which gauges the outlook in the next six months--rising to 26 from 10 in June. More firms expected increases in production, shipments, new orders, backlog of orders, employment, capital expenditures, supplier delivery times and materials inventories, the Kansas City Fed said.
Topics: Kansas, Missouri, Kansas City