by Bill McBride on 3/23/2017 11:00:00 AM
From the Kansas City Fed: Tenth District Manufacturing Activity Strengthened Further
The Federal Reserve Bank of Kansas City released the March Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity strengthened further with strong expectations for future activity.
“Our composite index accelerated again, and has only been higher one time in the last 15 years,” said Wilkerson. “The future employment index was the strongest in the 23-year history of the survey."
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. 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.
The Kansas City region was hit hard by the decline in oil prices, but activity is expanding solidly again. The regional Fed surveys released so far suggest another strong reading for the ISM manufacturing index for March.