Kansas City Fed’s Manufacturing Survey for November (Text)

Following is the text from the Kansas City Fed’s Manufacturing Survey.

Tenth District manufacturing activity eased further in November, while producers’ expectations were unchanged from last month at modestly positive levels. Several contacts noted uncertainties about the upcoming fiscal cliff, and a few producers cited delayed deliveries and reduced orders from the East Coast as a result of the Hurricane Sandy. Price indexes moderated slightly.

The month-over-month composite index was -6 in November, down from -4 in October and 2 in September (Tables 1 & 2, Chart). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. This marked the first time the composite index has been negative for two straight months since mid-2009. Manufacturing slowed at durable goods-producing plants, while nondurable factories reported a slight uptick in activity, particularly for food and plastics products. Other month-over-month indexes were mixed in November. The production index was unchanged at -6, while the new orders and order backlog indexes declined for the third straight month to their lowest levels in three years. In contrast, the employment index increased from -6 to 0, and the shipments and new orders for exports indexes were less negative. The raw materials inventory index decreased further from 2 to - 7, while the finished goods inventory index rose from 3 to 9.

Most year-over-year factory indexes decreased slightly from last month but remained positive. The composite year-over-year index eased from 11 to 9, and the production, shipments, new orders, and order backlog indexes also fell. On the other hand, the employment index rose from 12 to 22, and the capital expenditures index edged slightly higher. Both inventory indexes increased somewhat.

Most future factory indexes were unchanged in November, and remained modestly positive. The future composite index was stable at 3, and the future production, shipments, and new orders indexes also recorded little or no change. On the other hand, the employment index dropped somewhat, the future capital expenditures index fell after increasing last month, and the future new orders for exports index eased slightly. The future raw materials inventory index rose from -5 to 2, and the future finished goods inventory index also increased.

Price indexes moderated, after minimal change last month. The month-over-month finished goods price index eased from 8 to 3, and the raw materials price index also decreased modestly. The year-over-year raw materials index inched lower, and the finished goods index also edged down. The future raw materials price index dropped from 53 to 41, and the future finished goods price index decreased, indicating fewer firms plan to pass recent cost increases through to customers.

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