Thursday, September 28, 2017

Kansas City Fed: Regional Manufacturing Activity "Continued to Expand Solidly" in September

by Bill McBride on 9/28/2017 11:00:00 AM

From the Kansas City Fed: Tenth District Manufacturing Activity Continued to Expand Solidly

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 Tenth District manufacturing activity continued to expand at a solid pace and that firms remained optimistic about the future.

“Factories in the region reported another good month in September, with little impact overall from the Gulf Coast hurricanes,” said Wilkerson. 
...
The month-over-month composite index was 17 in September, up from 16 in August and 10 in July.  The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes.  Factory activity increased solidly at both durable and non-durable goods plants, particularly for chemicals, plastics, and machinery products.  Month-over-month indexes were somewhat mixed.  The production index remained unchanged, while the shipments, employment, and new orders for exports indexes increased mildly.  In contrast, the new orders index fell from 25 to 10, and the order backlog index also decreased.  The finished goods inventory index fell from 2 to -6, while the raw materials inventory index was mostly unchanged. 
emphasis added
This was the last of the regional Fed surveys for September.

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 (yellow, 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).

Based on these regional surveys, it seems likely the ISM manufacturing index will be strong again in September (to be released Monday, Oct 2nd).