November 2017 Kansas City Fed Manufacturing Remains Positive But Declines

Of the three regional manufacturing surveys released for November, all were in expansion.

Analyst Opinion of Kansas City Fed Manufacturing

Kansas City Fed manufacturing has been one of the more stable districts and their index declined. Key internals were in expansion but likewise declined.

There market expectations from Bloomberg / Econoday were 20 to 24 (consensus 23. The reported value was 16. Any value below zero is contraction.

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– The Federal Reserve Bank of Kansas City released the November 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 slightly but remained solid, and optimism for future activity remained high. “Factories reported another good month in November. However, a number of firms noted increasing difficulty finding skilled labor,” said Wilkerson.

The pace of growth in Tenth District manufacturing activity slowed slightly but remained solid, and optimism remained high for future activity. Raw materials price indexes increased modestly, while most indexes for selling prices were little changed. The month-over-month composite index was 16 in November, down from 23 in October and 17 in September (Tables 1 & 2, Chart 1). 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 food, plastics, computer and electronic products. Most month-over-month indexes eased somewhat from historically high levels in October. The production, shipments, new orders, and order backlog indexes all moderated slightly. The employment index slipped from 21 to 16, and the new orders for exports index fell into negative territory for the first time in 4 months. The finished goods inventory index dropped from 18 to 2, and the raw materials inventory index also decreased.