MANUFACTURING SECTOR SHOWS REBOUND AFTER LAST MONTH’S SLOWDOWN
Federal Reserve Bank of Kansas City Releases June Manufacturing Survey
KANSAS CITY, Mo. - The Federal Reserve Bank of Kansas City released the June 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 rebounded solidly in June after a brief slowdown last month, and producers remained generally optimistic about future activity.
“Factories in the region basically resumed their solid pace of growth from earlier in the year, following some disruptions in May,” said Wilkerson. “Also, hiring plans remain fairly solid for the second half of the year.”
Wilkerson said raw materials price indexes fell for the second straight month, but more producers plan to raise selling prices in the months ahead. According to the report:
Price indexes were mixed for finished goods, but raw materials indexes fell further indicating slower price appreciation. The month-over-month raw materials price index dropped from 54 to 36, and the finished goods price index also edged lower. The year-over-year raw materials price index eased from 87 to 85, while the finished goods price index remained unchanged. The future raw materials price index fell from 58 to 55, while the future finished goods price index increased somewhat, indicating slightly more firms plan to pass recent cost increases through to customers.
May's prospects for manufacturing were less robust than June's.
According to the June Beige Book for the Tenth District, issued on June 8:
Manufacturing and Other Business Activity
Growth in District manufacturing activity slowed following rapid growth in recent months, while other business activity expanded further. Factory orders declined after surging earlier in the spring, but factory hiring continued at solid rates and firms remained relatively optimistic about future sales. Growth in transportation activity accelerated from the previous survey, and most firms reported optimism about future sales. The majority of high-tech services firms reported strong growth in sales, though the pace slowed a bit from the previous month. Capital spending plans improved for transportation companies, and high-tech and manufacturing firms also reported fairly solid plans for future expenditures.