Tenth District Manufacturing Activity Strengthened Further
Tenth District manufacturing activity strengthened further in March, and many indexes of expectations for future activity were at or near record highs. Most price indexes increased moderately.
The month-over-month composite index was 20 in March, its highest reading since March 2011, up from 14 in February and 9 in March (Tables 1 & 2, Chart). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Activity in both durable and nondurable goods plants increased, particularly for metals, computer, electronic, and aircraft products. Most month-over-month indexes rose further in March. The production and shipments indexes increased considerably, while the new orders and order backlog indexes rose more moderately but remained high. The employment index moderated slightly from 17 to 13, and the new orders for exports index also eased. Both inventory indexes increased for the second straight month.
Most year-over-year factory indexes improved from the previous month. The composite year-over-year index grew from 6 to 14, and the production, shipments, new orders, and order backlog indexes also increased. The employment index jumped from -2 to 17, while the capital expenditures index eased slightly. The raw materials inventory index decreased from 3 to 1, while the finished goods inventory index moved into positive territory.
Expectations for future factory activity increased further to some of the highest levels in survey history. The future composite index edged up from 29 to 32, its highest reading ever. The future production, shipments, and new orders indexes all increased to near-record highs. The future employment index jumped from 30 to 43, its highest level in survey history, and the future capital expenditures index increased moderately. The future raw materials inventory index decreased from 20 to 8, and the future finished goods index also fell modestly.
Price indexes increased moderately in March. The month-over-month finished goods price index rose from 1 to 9, and the raw materials price index also edged up slightly. The year-over-year finished goods price index jumped from 13 to 26, and the raw materials price index also moved higher. The future raw materials price index rose from 53 to 59, and the future finished goods price index also increased.