Growth in tenth district manufacturing slowing

The Federal Reserve Bank of Kansas City released the December Manufacturing Survey revealing that growth in Tenth District manufacturing activity slowed, while expectations for future activity edged slightly higher. Price indexes were mixed, with a considerable drop in month-over-month price indexes but higher prices expected in the next six months. The month-over-month composite index was 3 in December, down from 15 in November and 8 in October (Tables 1 & 2, Chart 1). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The slowdown in factory growth was driven by both durable and nondurable goods producers, particularly metals, electronics, and petroleum/coal products. Most month-over-month indexes fell from the previous month’s reading, although the majority remained in positive territory. Exceptions included production, dropping from 24 to -18, and shipments, falling from 31 to -3, and new orders for exports, decreasing from 6 to -7. The employment index edged slightly higher, and new orders and order backlog indexes remained moderately positive. The materials inventory index rose from 15 to 19 and the finished goods inventory index also moved up.