Kansas City Fed Manufacturing Survey: Activity Was Flat
This article was originally written by Jill Mislinski. Starting in January 2023, AP Charts pages will be maintained by Jennifer Nash at Advisor Perspectives/VettaFi.
The latest Kansas City Fed Manufacturing Survey composite index came in at 0, up 1 from last month's figure. The future outlook came in at 1, down 2 from last month.
Here is an excerpt from the latest report:
Tenth District manufacturing activity was flat, and expectations for future activity were modest (Chart 1, Tables 1 & 2). Monthly and annual survey price indexes continued to increase slightly, and expectations for future raw material and finished goods prices also rose.
The month-over-month composite index was 0 in February, up slightly from -1 in January and -4 in December (Tables 1 & 2). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The pace of factory was affected by decreased activity at nondurable goods plants in February, especially plastics, chemical, and food manufacturing. Month-over-month indexes remained mostly negative in February. Indexes for new orders, number of employees, exports, and delivery time increased from January’s readings, while volume of shipments, order backlog, employment, materials, and finished goods indexes decreased slightly. Year-over-year factory indexes increased slightly, from a composite index of 4 to 5. The future composite index decreased from 3 to 1 in February with volume of new orders and capital expenditures indexes moving into negative territory this month. [More...]
Background on the Kansas City Fed Manufacturing Survey
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.