Tenth District Manufacturing Growth Slowed But Remained Solid
The pace of growth in Tenth District manufacturing activity slowed slightly but remained solid, and optimism remained high for future activity. Raw materials price indexes increased modestly, while most indexes for selling prices were little changed.
The month-over-month composite index was 16 in November, down from 23 in October and 17 in September (Tables 1 & 2, Chart 1). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Factory activity increased solidly at both durable and non-durable goods plants, particularly for food, plastics, computer and electronic products. Most month-over-month indexes eased somewhat from historically high levels in October. The production, shipments, new orders, and order backlog indexes all moderated slightly. The employment index slipped from 21 to 16, and the new orders for exports index fell into negative territory for the first time in 4 months. The finished goods inventory index dropped from 18 to 2, and the raw materials inventory index also decreased.
Most year-over-year factory indexes improved in November. The composite index edged higher from 34 to 37, and the production, shipments, order backlog, and employment indexes all moved higher. In contrast, the capital expenditures index inched lower from 21 to 19, and the new orders index fell slightly. The new orders for exports index was unchanged. The raw materials inventory index increased to 45, its highest reading in survey history, and the finished goods inventory index rose from 15 to 28.
Future factory activity expectations eased slightly from high levels. The future composite index inched lower from 32 to 27, and the future production, shipments, new orders, and order backlog also slowed slightly. The future capital expenditures index slipped from 22 to 20, while the future employment index was unchanged. The future raw materials inventory index dropped from 22 to 13, and the future finished goods inventory index decreased modestly. Most price indexes were unchanged or slightly higher in November. The month-over-month finished goods and raw materials price indexes were mostly unchanged. The year-over-year finished goods price index edged higher from 33 to 35, and the year-over-year raw materials price index increased further. The future finished goods price index rose from 32 to 37, and the future raw materials price index jumped from 43 to 59.