Kansas City Fed reports faster Tenth District manufacturing growth in August

Manufacturing activity grew at a slightly faster pace in the Tenth District in August, with the month-over-month composite index ticking up to 10 from 9 in July. Meanwhile, expectations for future activity stayed the same at 20. The month-over-month activity uptick was due to gains in paper and printing manufacturing offsetting slowing in durable manufacturing growth. At the same time, all indices except exports were positive, as the index for new orders for exports moved from -1 to -2. The Tenth Federal Reserve District encompasses the western third of Missouri; all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming; and the northern half of New Mexico.

The production index was unchanged at 17, while the shipments index stepped down from 20 to 17. Meanwhile, new orders rose from 10 to 16, while the employment index slipped from 2 to 0. The backlog of orders index ticked up from 2 to 4. At the same time, the pace of growth for prices paid and received strengthened, moving up from 52 to 55 and from 28 to 36, respectively. However, the indices for prices paid and prices received both fell over the year, decreasing to 87 and 69, respectively.

In August, survey respondents were asked special questions about factors increasing production and turnover. Nearly 39% of firms reported technology improvements as the top factor in allowing them to increase production without adding workers. Further, 22% cited reduced turnover, 8% mentioned outsourcing and 18% of respondents were not able to increase production without adding workers. When asked about turnover, 35% reported it to be lower than typical levels, while 21% had higher turnover and 44% saw unchanged levels.