by Bill McBride on 9/27/2012 11:00:00 AM
Thursday, September 27, 2012
From the Kansas City Fed: Growth in Tenth District Manufacturing Activity Slowed Somewhat
The Federal Reserve Bank of Kansas City released the September 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 activity slowed somewhat, although producers’ expectations for future activity remained relatively positive.This was below expectations of a 5 reading for the composite index. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
“Factories reported only minimal overall growth in our region in September, and both production and new orders fell slightly” said Wilkerson. “But firms anticipate growth to pick up later this year and on into next year.”
The month-over-month composite index was 2 in September, down from 8 in August and 5 in July, and the lowest in nine months. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. ... The production index dropped from 7 to -4, and the shipments, new orders, and order backlog indexes also moved into negative territory. The employment index eased from 2 to 1, while the new orders for export index inched higher but remained below zero. Both inventory indexes eased but were still in positive territory.
Despite the overall slowdown, most future factory indexes were little changed and remained at generally favorable levels. The future composite index was unchanged at 16, while the future shipments, new orders, and order backlog indexes increased slightly. The future employment index was stable at 16, while the future production index eased somewhat from 31 to 29. The future capital expenditures index fell for the second straight month, while the new orders for export index posted no change.
Click on graph for larger image.
The New York and Philly Fed surveys are averaged together (dashed green, through September), and five Fed surveys are averaged (blue, through September) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through August (right axis).
The ISM index for September will be released Monday, Oct 1st, and these surveys suggest another weak reading close to 50.
Posted by Bill McBride on 9/27/2012 11:00:00 AM