Economic Data and Growth

Manufacturing activity grew at a slightly slower pace in the Tenth District in May, with the month-over-month composite index decreasing to 8 in May from 10 in April. Meanwhile, expectations for future activity ticked up 1 point to 19. The month-over-month activity slowdown was due to a decline in growth of durable manufacturing, which offset a gain in nondurable manufacturing. At the same time, the majority of the indices remained positive but grew at a slower pace in May. 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 and shipments indices remained positive but slowed, declining from 10 to 9 and from 15 to 7, respectively. Meanwhile, new orders ticked up from 12 to 13, while the employment index turned negative, falling from 2 to -4 in May. The backlog of orders index jumped from 2 to 14. At the same time, the pace of growth for prices paid was unchanged at 63, while prices received advanced 4 points to 29. Furthermore, the indices for prices received and paid both increased over the year, rising to 72 and 89, respectively.

In May, survey respondents were asked special questions about changes in input and output prices and hiring and capital investment plan changes. Nearly two-thirds (65%) reported their input prices are changing more often than last year, compared to one-quarter seeing the same pace of changes and 10% citing less frequent changes. When asked about output prices, 33% reported output prices changing more often, 53% noted the same pace and 14% mentioned less changes. When asked about hiring, 22% expect to hire more workers, 20% expect to hire less and 58% have not changed their hiring plans since the start of the year. Further, 23% expect to decrease capital investments, 15% plan to increase capital investments and 62% have not changed their capital investment plans since the start of the year.