Following is the text from the Kansas City Fed’s Manufacturing Survey.
Tenth District manufacturing activity fell at a slower rate in March, but producers were considerably more optimistic about future months. A little over half of all firms indicated a short supply of workers, but the majority said wage pressures were generally contained. Most price indexes decreased somewhat after several months of little change.
The month-over-month composite index was -5 in March, up from - 10 in February but down from -2 in January (Tables 1 & 2, Chart). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The slight improvement in activity was largely concentrated in nondurable goods-producing plants, particularly food and chemicals. Most other month-over-month indexes also rose, but remained below zero. The production index increased from -11 to -1, and the shipments and new order indexes recorded levels of 0, the highest value in seven months. In contrast, the employment index posted its lowest level since July 2009, and the new orders for exports index also fell. The raw materials inventory index increased from -8 to -2, and the finished goods inventory index also edged higher.
Year-over-year factory indexes were mixed, with generally few changes overall. The composite year-over-year index improved from -4 to -1, and the new orders and order backlog indexes also increased but remained negative. The capital expenditures index rose for the second straight month and the new orders for exports index inched higher. The production and shipments indexes were generally unchanged, while the employment index eased slightly. Both inventory indexes rose after falling last month.
Most future factory indexes improved considerably in March. The future composite index jumped from 4 to 14, and the future production, shipments, new orders, and order backlog indexes also increased. The future employment index rose from 2 to 12, its highest level in six months. In addition, the future capital expenditures index edged up for the second straight month, and the future new orders for exports index posted a 15-month high. Both future inventory indexes increased but remained in negative territory.
Most price indexes moderated slightly from the previous month. The month-over-month raw materials price index decreased from 25 to 19, and the finished goods price index fell into negative territory. The year-over-year raw materials index inched lower, while the finished goods index moved slightly higher. The future raw materials price index dropped from 51 to 38, and the future finished goods price index eased somewhat, indicating fewer firms plan to pass recent cost increases through to customers.
SOURCE: Federal Reserve Bank of Kansas City
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