Survey of Tenth District Manufacturing 




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News Release
Federal Reserve Bank of Kansas City
Kansas City, Missouri 64198
Phone (816) 881-2683
Fax (816) 881-2569


FOR RELEASE Thursday, September 30, 2010
EMBARGOED FOR 11:00 A.M. EST
EMBARGOED FOR 11:00 A.M. EST

Tenth District manufacturing activity rebounded in September, and producers’ expectations for future activity also improved. Most price indexes in the survey edged higher, but finished goods price indexes remain at fairly low levels.

A summary of the September survey is attached to this press release. Results from past surveys and release dates for future surveys can be found at: http://www.kc.frb.org/mfgsurv/mfgmain.htm. For further information about the survey, contact Tim Todd, Public Affairs Department, (816) 881-2308.

The Tenth Federal Reserve District encompasses Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico, and western Missouri.


Survey of Tenth District Manufacturing
Tenth District manufacturing activity rebounded in September, and producers’ expectations for future activity also improved. Most price indexes in the survey edged higher, but finished goods price indexes remain at fairly low levels.

The net percentage of firms reporting month-over-month increases in production in September was 14, up from 0 in August and equal to 14 in July (Tables 1 & 2, Chart). The increase in production occurred among both durable and nondurable goods producing plants, with the exception of machinery and equipment producers, who reported some further slowdown. The majority of other month-over-month indicators also improved. The shipments, new orders, and order backlog indexes jumped back into positive territory, and the new orders for exports index climbed from -1 to 10, its highest level in nearly three years. The employment index was unchanged and the supplier delivery time index was also stable. The raw materials inventory index fell from 6 to -1, while the finished goods inventory index inched higher.

Year-over-year factory indexes increased after last month’s slight drop. The production index rose from 18 to 22, and the shipments, new orders, and order backlog indexes also edged up. The employment index improved from -8 to -2, and the capital expenditures and supplier delivery time indexes also climbed higher. The new orders for exports index remained unchanged at 12. Both inventory indexes increased slightly.

Future factory activity indexes rebounded in September, as more producers were optimistic about future growth. The future production index rose from 10 to 23, and the future shipments, new orders, and new orders for exports indexes also improved over last month. The future employment index increased for the second straight month and the future order backlog index reached its highest level since early 2006. The future capital expenditures index rose from -4 to 8, after three months in negative territory. The future raw materials inventory index increased slightly, while the future finished goods inventory index fell from 0 to -3.

Most price indexes edged higher from the previous survey. The month-over-month finished goods price index rose modestly from -4 to -1, and the raw materials price index increased after three months of no change. The year-over-year finished goods price index inched up, while the raw materials price index eased somewhat from 51 to 48. The future raw materials price index climbed from 30 to 40, and the future finished goods price index rose from 7 to 10, as slightly more firms plan to pass recent cost increases through to customers.

Table1      
Summary of Tenth District Manufacturing Conditions, September 2010
  September vs. August
(percent)1		 September vs. Year Ago
(percent)1		 Expected in Six Months
(percent)1
Plant Level Indicators
Increase No
Change		 Decrease Diff
Index2		 SA
Index3
Increase No
Change		 Decrease Diff
Index2
Increase No
Change		 Decrease Diff
Index2		 SA
Index3
 
Production
36 44 20 16 14
52 16 30 22
44 33 20 24 23
Volume of shipments
38 38 21 16 15
52 16 27 25
44 27 23 21 19
Volume of new orders
33 38 25 8 9
49 18 28 20
47 28 19 27 28
Backlog of orders
28 43 24 4 4
34 32 29 4
37 40 16 20 23
Number of employees
16 65 16 0 -2
30 34 32 -2
32 44 21 10 7
Average employee workweek
22 59 16 5 2
32 38 26 6
26 52 18 8 6
Prices received for finished product
9 80 7 2 -1
34 39 23 11
24 60 13 10 10
Prices paid for raw materials
32 64 2 29 25
58 29 10 48
49 43 5 44 40
Capital expenditures 
24 47 24 0
32 44 20 12 8
New orders for exports
18 64 4 13 10
21 55 9 12
16 65 4 12 12
Supplier delivery time
11 80 4 7 4
19 65 12 7
12 76 7 4 3
Inventories:   
     Materials
19 60 20 -1 -1
32 30 36 -3
24 50 24 0 -2
     Finished goods
19 60 16 2 5
29 33 32 -2
19 54 20 -1 -3


1Percentage may not add to 100 due to rounding.
2Diffusion Index. The diffusion index is calculated as the percentage of total respondents reporting increases minus the percentage reporting declines.
3Seasonally Adjusted Diffusion Index. The month vs. month and expected-in-six-months diffusion indexes are seasonally adjusted using Census X-12.
Note: The September survey included 125 responses from plants in Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico, and western Missouri.

Table2
Historical Manufacturing Survey Indexes
 Sep'09Oct'09Nov'09Dec'09Jan'10Feb'10Mar'10Apr'10May'10Jun'10Jul'10Aug'10Sep'10
Versus a Month Ago
(seasonally adjusted)		  
Production 12 5 15 7 13 19 18 24 5 3 14 0 14
Volume of shipments 8 0 8 3 9 14 17 27 -3 1 12 -6 15
Volume of new orders 7 7 10 0 9 11 12 15 -2 0 9-13 9
Backlog of orders-10 -1 0 -4 0 -5 7 11 -3 -9 -2-16 4
Number of employees -3 -4 0 -1 2 -4 3 5 1 -1 5 -2 -2
Average employee workweek 8 -3 4 0 4 -3 1 6 9 -2 1 -6 2
Prices received for finished product -6 -6 1 -1 0 0 5 5 -1-14 -9 -4 -1
Prices paid for raw materials 9 12 21 22 42 45 42 53 37 14 14 14 25
Capital expendituresn/an/an/an/an/an/an/an/an/an/an/an/an/a
New orders for exports 2 3 2 5 6 0 4 5 0 3 0 -1 10
Supplier delivery time 3 3 11 8 8 12 11 10 15 5 0 3 4
Inventories:      Materials-15 -4 -6-12 -7 -1 3 -7 6 -4 -1 6 -1
Inventories:      Finished goods -7 2 -6 -1 0 0 -7 -9 6 1 0 2 5

Versus a Year Ago
(not seasonally adjusted)		  
Production-46-40-31-30-10 -9 -1 14 16 9 25 18 22
Volume of shipments-43-40-28-31-10-11 -5 15 13 6 25 18 25
Volume of new orders-43-37-16-25-11 -8 -3 19 23 6 23 16 20
Backlog of orders-48-44-24-32-14-19-13 -3 0 -5 6 3 4
Number of employees-56-47-49-48-39-29-31-18-18-12-10 -8 -2
Average employee workweek-40-33-28-32-20-11-10 -1 8 -4 5 9 6
Prices received for finished product-14-14-12-10 -1 -4 7 7 9 9 7 7 11
Prices paid for raw materials -9 -5-12 6 25 38 55 58 63 53 50 51 48
Capital expenditures-24-25-26-31-14-15 -8 -5 -5 -5 4 -9 0
New orders for exports -7 -6 -8 0 6 7 2 7 8 7 14 12 12
Supplier delivery time 1 -2 -3 0 -1 2 10 8 10 0 3 4 7
Inventories:      Materials-37-37-34-35-18-20-17-12-14-14 -9 -5 -3
Inventories:      Finished goods-17-14-24-12-14-14-11 -9 -8 -4 -5 -8 -2

Expected in Six Months
(seasonally adjusted)		  
Production 17 24 32 17 35 24 33 22 32 21 23 10 23
Volume of shipments 12 18 31 15 35 32 36 21 33 24 22 9 19
Volume of new orders 17 26 23 17 25 25 27 28 31 23 23 16 28
Backlog of orders 0 13 16 7 12 5 16 9 16 12 11 4 23
Number of employees 1 4 8 2 9 18 20 18 14 9 1 2 7
Average employee workweek 5 5 16 8 7 13 10 4 13 2 0 -2 6
Prices received for finished product 1 0 5 8 12 15 19 17 17 11 9 7 10
Prices paid for raw materials 20 28 32 31 60 59 55 61 45 40 26 30 40
Capital expenditures -8 -5 -1 0 14 3 5 11 5 -4 -3 -4 8
New orders for exports 7 10 9 11 13 12 5 11 7 5 5 7 12
Supplier delivery time 4 -1 6 10 6 6 9 15 9 0 8 6 3
Inventories:      Materials-12 -6 -3 -2 3 6 4 3-10-10 -8 -6 -2
Inventories:      Finished goods-11 -7 -5 2 2 1 -4 0 -6-11 -4 0 -3



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