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Friday, December 21, 2018

Kansas City Fed: Regional Manufacturing Activity "Growth Slowed" in December

by Calculated Risk on 12/21/2018 11:00:00 AM

From the Kansas City Fed: Growth in Tenth District Manufacturing Activity Slowed

The Federal Reserve Bank of Kansas City released the December 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, while expectations for future activity edged slightly higher.

“Factories in our region reported a drop in production in December but continued growth in orders, employment, and capital spending” said Wilkerson. “Several contacts noted difficulties with weather or with having enough workers to meet demand.”
The month-over-month composite index was 3 in December, down from 15 in November and 8 in October. 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.
emphasis added
So far, all of the regional surveys have indicated slower growth in December than in November.