Following is the text from the Kansas City Fed’s Manufacturing Survey.
The Federal Reserve Bank of Kansas City released the April Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that growth in Tenth District manufacturing eased further in April, but activity remained expansionary and well above year-ago levels.
“Factories in our region report continued growth, especially in employment, but at somewhat slower rates than in previous months, when unseasonably warm weather may have helped boost activity” said Wilkerson. “Expectations for the rest of the year notched down a bit as well, but remained positive.”
Growth in Tenth District manufacturing eased further in April, but activity remained expansionary and well above year-ago levels. The majority of producers reported some negative effects from elevated gasoline prices, and nearly half of all respondents noted difficulties finding workers. Price indexes were mixed, with slight easing in some materials price indexes and fewer producers planning to raise selling prices.
The month-over-month composite index was 3 in April, down from 9 in March and 13 in February (Tables 1 & 2, Chart). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Manufacturing growth eased in most durable and nondurable goods-producing plants, with the exception of fabricated metal, plastics, and rubber products. Other month-over-month indexes also slowed in April. The production index dropped from 13 to 0, and the shipments, new orders, and order backlog indexes also fell. In contrast, the employment index remained unchanged, and the new orders for exports index edged up slightly. The raw materials inventory index increased from 0 to 5, while the finished goods inventory index fell after rising the past two months.
Year-over-year factory indexes were generally stable in April. The composite year-over-year index was unchanged at 24, and the order backlog index also remained flat. The production, shipments, and new orders indexes eased slightly, and the new orders for exports index fell into negative territory. However, the employment index jumped from 23 to 31 - its highest level since early 2007 - and the capital expenditures index increased for the third straight month. Both inventory indexes edged higher.
The majority of future factory indexes eased slightly, but remained close to levels in late 2011. The future composite index decreased from 18 to 12, and the future production, new orders, shipments, and order backlog indexes also fell. The future employment index moderated after posting solid gains the last few months, and the future capital spending index dropped to its lowest level since late 2010. The future raw materials inventory index decreased from -5 to -8, and the future finished goods inventory index dropped into negative territory.
Price indexes were mixed. The month-over-month raw materials price index decreased to its lowest level in nearly two years, while the finished goods price index edged higher from 3 to 7. The year-over-year raw materials price index inched higher from 71 to 74, and the finished goods price index also rose. The future raw materials price index eased from 65 to 54, and the future finished goods price index fell to an 18-month low, indicating fewer firms plan to pass recent cost increases through to customers.