Thursday, February 28, 2019

Kansas City Fed: "Tenth District Manufacturing Activity Up Only Slightly"

by Calculated Risk on 2/28/2019 11:00:00 AM

From the Dallas Fed: Tenth District Manufacturing Activity Up Only Slightly

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 was up only slightly, while expectations for future activity remained positive but were slightly lower than in previous months.

Regional factories saw hardly any growth in February,” said Wilkerson. “More than three-quarters of firms reported difficulties in finding workers, despite wage increases.”
...
The month-over-month composite index was 1 in January, down from 5 in January and 6 in December. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Factories expanded durable goods production, particularly machinery and transportation equipment, while manufacturing of more non-durable goods, including food and beverage products, declined. Most month-over-month indexes decreased in February, with production, shipments, and new orders dropping into negative territory. However, the month-over-month employment index expanded moderately.
emphasis added
This was the last of the regional Fed surveys for February.

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 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).

Based on these regional surveys, it seems likely the ISM manufacturing index will be at about the same level in February as in January. The consensus forecast is for a reading of 55.0 (to be released on Friday, March 1st).