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Thursday, March 25, 2021

Kansas City Fed: Tenth District Manufacturing Activity "Grew Solidly" in March

by Calculated Risk on 3/25/2021 02:10:00 PM

From the Kansas City Fed: Tenth District Manufacturing Activity Grew Solidly

The Federal Reserve Bank of Kansas City released the March 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 grew solidly compared to a month ago and a year ago with positive expectations for future activity.

“Regional factories continued to report solid growth in March,” said Wilkerson. “Materials prices remain extremely high for most firms. However, many manufacturers have been able to pass through at least a portion of the price increases on to customers.”
The month-over-month composite index was 26 in March, higher than 24 in February and 17 in January. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The growth in district manufacturing activity was driven more by durable goods plants for primary metals, machinery, transportation equipment, furniture, and miscellaneous manufacturing. Month-over-month indexes for shipments, new orders, and order backlog expanded at a faster pace in March and supplier delivery time was very high as well. Growth in production and employment remained positive, but slightly slower than in recent months. Materials inventories were positive while finished goods inventories dipped further from a month ago. Year-over-year factory indexes rose in March, and business conditions are now comparable to levels at the start of the pandemic last year. The year-over-year composite index increased from 8 to 16, but new orders for exports and finished goods inventories continued to lag year-ago levels. The future composite index expanded slightly from 34 to 35 with an uptick in employment expectations.
emphasis added
These regional surveys have been strong in March.