Growth of Manufacturing Activity in Central U.S. Soars in April to Record-High — Kansas City Fed
Manufacturing activity in the central part of the U.S. accelerated its expansion pace in April from already solid levels the previous month, data from a survey from the Federal Reserve Bank of Kansas City showed Thursday.
The Tenth District Manufacturing Survey’s composite index came in at 31 in April, up from 26 in March and the highest monthly reading in the survey’s history. Economists polled by The Wall Street Journal expected the indicator to increase to 27.
The index, which takes into account factors such as production and employment, covers the western third of Missouri, all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming, and the northern half of New Mexico. Values greater than zero suggest expansion, while values below zero indicate contraction. April marks the eleventh consecutive month in which the index remains in growth territory.
“Regional factories reported historic growth and very positive expectations in April,” Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, said.
Manufacturing activity growth was driven by higher activity levels at durable goods plants, especially for primary and fabricated metals, and transportation equipment manufacturing, the report said.
The composite index is an average of the production, new orders, employment, supplier delivery time and raw materials inventory indexes.
Indexes for production and employment reached record high levels in April. Shipments, employee workweek, order backlog and new orders for exports expanded at a faster pace in April compared with March, and new orders and supplier delivery time indexes remained high.
“Compared to prepandemic levels, new orders and employment have risen for some contacts, but varied by industry,” Mr. Wilkerson said. Looking forward, firms remained concerned about the lack of qualified workers, supply chain constraints, and high materials prices, he said.
The production index surged to 40 in April from 23 the prior month, the volume of shipments rose to 32 from 27 and the volume of new orders fell to 29 from 37 in March. The employment index rose to 29, a record high.
The supplier delivery time index fell to 35 from 41 the previous month, while the raw materials inventory index edged up sharply to 24 from 11 in March.
The prices paid for raw materials index further increased to 73 from 66 in March, while prices received for finished products index also grew significantly to 41, the data showed.
Manufacturing firms expectations about the short-term outlook remained positive. The future composite index, which relates to the outlook in the next six month, fell to 34 from 35 in March.
The six-month production index remained at 45, the data showed. Shipments and new orders outlook improved further and employment expectations also rose.
Source: Dow Jones