Thursday, February 28, 2013

Kansas City Fed: Regional Manufacturing contracted in February

by Bill McBride on 2/28/2013 01:30:00 PM

This is the last of the regional manufacturing surveys for February, and the results have been mixed. From the Kansas City Fed: Tenth District Manufacturing Survey Contracted Further

The Federal Reserve Bank of Kansas City released the February Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity contracted further in February, and factories’ expectations weakened somewhat.

“Factory activity fell more sharply in February than in previous months. Some contacts cited disruptions due to bad weather, and many firms noted that possible federal spending cuts were hurting business,” said Wilkerson. However, capital spending plans for later in the year improved considerably.”

The month-over-month composite index was -10 in February, down from -2 in January and -1 in December ...
Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Fed Manufacturing Surveys and ISM PMI Click on graph for larger image.

The New York and Philly Fed surveys are averaged together (dashed green, through February), and five Fed surveys are averaged (blue, through February) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through January (right axis).

The average of the five regional surveys was slightly negative again, but improved from January.

The ISM index for February will be released tomorrow, Friday, March 1st, and these surveys suggest another weak reading. However the Chicago PMI (released this morning) indicated stronger expansion, and the Markit Flash PMI for February was solid too. So the ISM PMI will probably show sluggish expansion.

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