News

Manufacturing activity contracted modestly in the Tenth District in January, while expectations for future activity remained positive but slipped from 17 to 15 from December. 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 month-over-month decrease in activity was due to modest declines in both durable and nondurable manufacturing. Most month-over-month indexes were negative, apart from employment, prices and finished goods inventories.

Production fell three points to -9, while new orders improved from -16 to -6. Employment remained roughly the same in January. The backlog of orders remained negative but ticked up to -19 from -22. The year-over-year composite index for factory activity increased from -16 to -9 but stayed negative. Like in December, capital expenditures, prices received and prices for raw materials all increased year-over-year in January while other indexes declined.

This month, survey respondents were asked about their firms’ exports and imports. More than half of firms (55%) sell 1% to 25% of their products or services outside of the U.S., while more than two-thirds (67%) source 1% to 25% of their inputs from outside of the U.S. On the other hand, more than one-third (36%) of firms do not sell their products or services internationally, and only 16% of firms source none of their imports from outside of the U.S. Additionally, a majority of firms do not expect their sourcing decisions to change in the next year (57%) or next three years (53%). Almost a quarter of firms (23%) anticipate slight reductions in internationally sourced inputs in the next three years. Over the next year, 16% of firms forecast increases in sourcing outside of the U.S., while 18% expect increases in the next three years.