Factory Activity in Central U.S. Barely Grew in September -- Kansas City Fed
By Xavier Fontdegloria
Manufacturing activity in the central U.S. region expanded
marginally in September, broadly at the same pace as it did in
August, according to data from the Federal Reserve Bank of Kansas
City released Thursday.
The Tenth District manufacturing survey's composite index fell
to 1 in September from 3 in August, the lowest reading since July
2020. Economists polled by The Wall Street Journal expected the
index to come in at 5.
The indicator gauges manufacturing activity of firms located in
the western third of Missouri, all of Kansas, Colorado, Nebraska,
Oklahoma and Wyoming, and the northern half of New Mexico. A value
greater than zero signals that activity in the region grew over the
"Regional factory activity was sluggish overall in September,"
said Chad Wilkerson, vice president and economist at the Federal
Reserve Bank of Kansas City.
The slower pace in factory growth in September was driven by
decreased activity at durable goods plants, especially electrical,
furniture, nonmetallic mineral, primary metal, fabricated metal and
transportation equipment manufacturing, The Kansas City Fed
The production index increased to 2 in September from minus 9 in
August, suggesting output increased slightly over the month.
Demand remained depressed, according to the data. The volume of
shipments index increased to zero from minus 13, signaling stable
shipments, and the volume of new orders index rose slightly to
minus 11, indicating falling orders.
"I'm told our customers are overstocked with our products, so a
correction is taking place," one of the respondents of the survey
The employment index was stable at 10, in a sign that firms
continued to hire workers at a steady pace.
Supply-chain snarls eased markedly, data from the survey showed.
The backlogs of orders index increased slightly to minus 4, but
still pointed to a decrease in backlogs, and the supplier delivery
time index fell sharply to minus 2, suggesting that delivery times
shortened compared with the prior month.
Inflation pressures gained pace. The index of prices paid for
raw materials rose to 41 from 38, and the index of prices received
for finished products increased to 27 from 25.
Firms were moderately optimistic about the short-term outlook.
The future composite index--which gauges the outlook in the next
six months--decreased to 9 from 10, and most of those surveyed
expect further price increases.
Write to Xavier Fontdegloria at email@example.com
(END) Dow Jones Newswires
September 22, 2022 11:41 ET (15:41 GMT)
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