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Kansas City Fed's manufacturing index enters 6th month of contraction


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According to Market Intelligence, April 2023

Kansas City Fed's manufacturing index enters 6th month of contraction

Manufacturing activity in the 10th Federal Reserve District registered its sixth month of contraction in December as durable goods plants continued to show weak activity, according to new survey results from the Federal Reserve Bank of Kansas City.

The Kansas City Fed's month-over-month composite index came in at negative 8, falling from negative 3 in November. The composite index is an average of indexes measuring production, new orders, employment, supplier delivery time and raw materials inventory.

The Kansas City Fed said manufacturing activity declined at factories that make wood products, nonmetallic mineral products, primary metal, fabricated metal products, machinery, and computer and electronic products.

Among manufacturers in the 10th District, nearly 44% reported higher net profits over the past year while a similar number reported lower earnings. More than 56% of manufacturers in the area expected higher net profits over the next 12 months.

Some survey respondents quoted by the Kansas City Fed in its report cited difficulties in finding and retaining workers, continued uncertainty regarding future tariffs and trade issues, as well as weakness in the oil and gas industry.

The composite index gauging expectations for future manufacturing activity decreased to 10 from last month's 15.

The Fed's 10th District includes Kansas, Colorado, Nebraska, Oklahoma, Wyoming, the western third of Missouri, and the northern part of New Mexico.