Growth in Tenth District manufacturing activity edged higher in November, while expectations for future activity moderated slightly. Price indexes were mixed.
The month-over-month composite index was 15 in November, up from 8 in October and 13 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. The increase in factory growth was driven by both durable and nondurable goods producers, particularly metals, aircraft, food, and plastics. Most month-over-month indexes rose modestly. The production, shipments, new orders, and order backlog indexes all increased to their highest levels since the middle of the year. The new orders for exports index inched up from 3 to 6, while the employment index eased somewhat. The materials inventory index rose from 10 to 15 and the finished goods inventory index also moved higher.
Most year-over-year factory indexes were lower than a year ago. The composite index eased from 45 to 40, and the production, shipments, new orders, and order backlog indexes also decreased. In contrast, the employment index was unchanged, and the capital expenditures index jumped from 30 to 48. The finished goods and raw materials inventory indexes both rebounded after falling last month.
Future factory activity expectations moderated further. The future composite index eased from 21 to 16, and the future production, shipments, new orders, and order backlog indexes also fell somewhat. On the other hand, the future employment index edged up from 15 to 20, and the future capital expenditures and new orders for exports indexes also increased moderately. The future finished goods inventory index moved into positive territory, while the future raw materials inventory index was unchanged.
Price indexes were mixed in November. The month-over-month finished goods price index inched higher from 19 to 23, and the raw materials price index increased from 33 to 41. The year-over-year raw materials price index eased from 78 to 75, while the finished goods price index was basically unchanged. The future raw materials price index rose from 37 to 46, while the future finished goods price index moved slightly lower.
“The 4th Quarter is looking good. If the weather stays cold, we should see a strong finish to our year. We are feeling good about the future.”
“Tariffs and threats of tariffs are still a big financial concern.”
“At this stage of the economic expansion, labor availability and the uncertainty around tariffs are the significant but manageable problems we face.”
“'We are having difficulty finding entry level job applicants.”
“This is the middle of our busy season, and we will likely see a slowdown in Q1 and Q2. We are planning to use that time to train new hires for operator positions.”