Following is the text from the Kansas City Fed’s Manufacturing Survey.
Growth in Tenth District manufacturing activity slowed in June, and expectations eased as producers grew more uncertain. Many respondents reported concerns about economic conditions in Europe, though only a few noted sizeable direct negative impacts. Price indexes fell, but most remained above zero, indicating continued increases but at a slower rate. The month-over-month composite index was 3 in June, down from 9 in May and equal to 3 in April. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Manufacturing growth decreased in most durable and nondurable goods-producing plants, with the exception of food and aircraft production, which increased somewhat. Most other month-over-month indexes also fell in June.
The production index eased from 17 to 12, and the new orders index fell back into negative territory after rising slightly last month. Order backlogs continued to ease. The employment index moved lower but remained positive, while the new orders for exports index decreased. The raw materials inventory index rose from 1 to 5, while the finished goods inventory index declined. The majority of year-over-year factory indexes posted levels similar to last month. The composite year-over-year index eased from 27 to 24, while the new orders and shipments indexes were unchanged. The production index slipped from 38 to 32, and the employment index also edged slightly lower. The capital expenditures index was steady at a fairly solid level, while both inventory indexes decreased somewhat. Future factory indexes fell after rising solidly last month, but generally remained moderately positive.
The future composite index dropped from 17 to 8, and the future production, shipments, and employment indexes also decreased considerably. The future new orders and order backlog indexes posted their lowest levels since May of 2009, but more firms expected increases in orders than decreases. The future capital spending index moved slightly lower from 19 to 17, and the future new orders for exports index also fell marginally. The future raw materials inventory index declined from 0 to -11, and the future finished goods inventory index eased slightly. Price indexes moderated for the second straight month, including an actual decline in monthly selling prices. The month-over-month finished goods price index dropped from 0 to -4, its lowest level since mid-2010, and the raw materials price index also decreased. The year-over-year raw materials price index edged lower, and the finished goods price index posted an 18-month low. The future raw materials price index fell from 48 to 40, and the future finished goods price index eased after rising last month, indicating fewer firms plan to pass recent cost increases through to customers.