Factory Activity Remained Mostly Steady
Tenth District manufacturing activity remained mostly steady in May, while expectations for future activity also stayed flat (Chart 1, Tables 1 & 2). Prices for raw materials have cooled significantly and prices for finished goods also eased somewhat over the last month and last year. Prices are expected to cool further in the next six months.
The month-over-month composite index was -1 in May, up from -10 in April and down from 0 in March (Tables 1 & 2). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The increase from last month was driven by both durable and non-durable goods, especially by paper, primary metal, and miscellaneous durable goods manufacturing. Month-over-month indexes were mixed. The production, volume of shipments, volume of new orders, number of employees, and finished goods inventories indexes all increased closer to their March levels after a significant decline in April. The average employee workweek and new orders indexes decreased slightly over the last month. All year-over-year indexes increased or stayed close to their April levels, with the exception of the price indexes which cooled. The future composite index was modestly positive, at 2. Most indexes of expectations for activity in six months remained similar to last month, except for increases in new orders and backlog of orders and cooling in the price indexes.
Manufacturing Composite Indexes
Skip to data visualization table| Date | Vs. a Month Ago | Vs. a Year Ago |
|---|---|---|
| May-22 | 21 | 54 |
| June-22 | 11 | 35 |
| July-22 | 13 | 46 |
| Aug-22 | 5 | 36 |
| Sept-22 | 4 | 30 |
| Oct-22 | -2 | 24 |
| Nov-22 | -2 | 19 |
| Dec-22 | -4 | 15 |
| Jan-23 | -1 | 4 |
| Feb-23 | 0 | 5 |
| Mar-23 | 0 | 6 |
| Apr-23 | -10 | -2 |
| May-23 | -1 | 6 |
Special Questions
This month contacts were asked special questions about prices and input costs. Compared to last year, a majority of firms expect their materials costs, selling prices, and wages to rise at a similar or slower rate next year (Chart 2). Additionally, District firms have varying abilities to pass through higher costs to customers (Chart 3).
Selected Manufacturing Comments
“Our customers cannot absorb the rising cost quickly enough for us to pass through the price increases. The market is simply too volatile.”
“See some stabilization and even softening of the underlying commodities.”
“Wages increases are expected to slow, however additional regional adjustments will be necessary to keep pace with local markets.”
“Currently sales are brisk and salesforce doing a good job.”
“Concerns around general economic conditions are increasing.”
“Still a grind to find entry level employees.”
“Labor availability is becoming slightly better, quality is not good. Supply chain is way better than 6 months to a year ago.”
“Business seems to be slowing a bit.”