Tenth District Manufacturing Activity Expanded Moderately
Tenth District manufacturing activity expanded moderately again, and expectations for future activity eased slightly but remained positive. Price indexes remained mixed, with modest increases in finished goods prices.
The month-over-month composite index was 10 in July, down slightly from 11 in June but up from 8 in May. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Factory activity increased moderately at non-durable goods plants, particularly for chemicals and plastics, while durable activity moderated somewhat. Month-over-month indexes were mixed. The production index tumbled from 23 to 4, and the shipments index fell into negative territory for the first time since August 2016. Conversely, the employment index remained solid, while the new orders index rose modestly, and the order backlog index also increased but remained negative. The raw materials inventory index rose slightly, and the finished good inventory index increased back into positive territory.
The year-over-year factory indexes were mixed in July. The year-over-year production index declined from 43 to 28, and the composite, shipment, new orders for exports, and employment indexes eased modestly. However, the new orders, order backlog, and capital expenditures indexes moved slightly higher. The raw materials inventory index fell moderately, while the finished goods inventory index inched down from 10 to 7.
Expectations for future factory activity edged down but remained positive. The future composite index fell from 25 to 19, and the future production and new orders indexes also decreased moderately but remained in positive territory. The future employment, shipments, and order backlog indexes inched lower. In contrast, the future capital expenditures index remained unchanged, while the future employee workweek index increased from 10 to 17. The future raw materials inventory index rose from 0 to 4, and the future finished goods inventory index increased to a five month high.
Price indexes remained mixed in July. The month-over-month finished goods price index increased from –2 to 7, while the raw materials price index inched higher. The year-over-year finished goods price index rose from 15 to 20, while the year-over-year raw materials price index eased slightly. The future raw materials price index decreased from 49 to 36, and the future finished goods price index moderated.