Kansas City Fed: "Growth in Tenth District Manufacturing Activity Continued at a Modest Pace"
From the Kansas City Fed: Growth in Tenth District Manufacturing Activity Continued at a Modest Pace
The Federal Reserve Bank of Kansas City released the May 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 continued at a modest pace, and expectations for future activity remained generally solid.A couple of industry comments:
“Regional factory growth was sluggish again in May,” said Wilkerson. “Several firms noted that new tariffs were disrupting activity.”
The month-over-month composite index was 4 in May, similar to a reading of 5 in April but down from 10 in March. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Growth continued to grow modestly at most durable and nondurable production plants, with stronger growth for food, plastics, and metals products. Most month-over-month indexes slowed slightly in May but remained positive, with production, shipments, and new orders indexes all decreasing. In contrast, the employment index rebounded from 2 to 5, and both inventory indexes also increased. Most year-over-year factory indexes showed little change, with the composite index inching higher from 22 to 23. The future composite index also edged up, moving from 11 to 12, and most future factory activity indexes remained stable or moved slightly higher.
“The increased costs of steel and plastic are crippling us.”
“April was a down month but May will be worse. Tariffs will force us to reduce our workforce and increase costs to the consumer.”