Survey of Tenth District Manufacturing 




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News Release
Federal Reserve Bank of Kansas City
Kansas City, Missouri 64198
Phone (816) 881-2683
Fax (816) 881-2569


FOR RELEASE Thursday, October 29, 2009
EMBARGOED FOR 11:00 A.M. EST
EMBARGOED FOR 11:00 A.M. EST

Growth in Tenth District manufacturing activity moderated somewhat in October, but producers were more optimistic about future activity. Price indexes increased somewhat for raw materials, while finished goods price indexes were generally stable.

A summary of the October survey is attached to this press release. Results from past surveys and release dates for future surveys can be found at: http://www.kc.frb.org/mfgsurv/mfgmain.htm. For further information about the survey, contact Tim Todd, Public Affairs Department, (816) 881-2308.

The Tenth Federal Reserve District encompasses Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico, and western Missouri.


Survey of Tenth District Manufacturing
Growth in Tenth District manufacturing activity moderated somewhat in October, but producers were more optimistic about future activity. Price indexes increased somewhat for raw materials, while finished goods price indexes were generally stable.

The net percentage of firms reporting month-over-month increases in production in October was 6, down from 16 in September but up from -7 in August (Tables 1 & 2, Chart). Production increased at durable goods plants, but fell for most non-durable goods producers, particularly food and chemicals. Other month-over-month indexes were mixed. The shipments index dropped from 12 to 1, and the employment index was slightly lower than last month. The new orders index edged up from 10 to 11, and the order backlog index moved into positive territory for the first time in over a year. The new orders for exports index remained basically unchanged, and both inventory indexes increased markedly.

The majority of year-over-year factory indexes continued to rise in October, though from highly negative levels. The production index climbed from -46 to -40, and the shipments, new orders, and order backlog indexes also increased. The employment index rose from -56 to -47, while the capital expenditures index ticked down slightly. The finished goods inventory index edged up from -17 to -14 and the raw materials inventory index was stable.

Most future factory activity indexes improved over the previous month, with producers becoming increasingly optimistic. The future production index climbed from 20 to 29, and the future shipments and order backlog indexes also increased. The future employment index inched higher, and the future new orders index posted its highest level in almost two years. The future capital expenditures index rose from -7 to -2, and the future new orders for exports index also edged up slightly. Both inventory indexes increased for the second straight month.

The majority of price indexes were either unchanged or rose somewhat in October. The month-over-month raw materials price index rose from 15 to 18, and the finished goods price index remained unchanged. The year-over-year raw materials price index crept up from -9 to -5, and the finished goods price index was unmoved. The future finished goods price index was basically stable, while the future raw materials price index climbed from 23 to 34.



Table1      
Summary of Tenth District Manufacturing Conditions, October 2009
  October vs. September
(percent)1		 October vs. Year Ago
(percent)1		 Expected in Six Months
(percent)1
Plant Level Indicators
Increase No
Change		 Decrease Diff
Index2		 SA
Index3
Increase No
Change		 Decrease Diff
Index2
Increase No
Change		 Decrease Diff
Index2		 SA
Index3
 
Production
27 44 26 0 6
21 14 62 -40
45 31 19 25 29
Volume of shipments
27 40 30 -3 1
22 14 62 -40
44 31 22 22 25
Volume of new orders
31 37 29 2 11
20 19 57 -37
46 30 19 26 31
Backlog of orders
22 45 29 -6 3
11 29 55 -44
33 46 17 15 18
Number of employees
16 61 22 -5 0
16 18 63 -47
27 47 22 5 10
Average employee workweek
16 60 22 -5 -2
11 42 44 -33
25 53 18 7 12
Prices received for finished product
5 81 12 -7 -4
23 37 38 -14
19 60 18 1 2
Prices paid for raw materials
20 69 7 12 18
35 20 40 -5
40 46 11 29 34
Capital expenditures 
21 29 47 -25
25 44 27 -2 -2
New orders for exports
10 70 7 3 4
14 54 20 -6
17 62 8 8 12
Supplier delivery time
10 81 6 3 4
14 65 17 -2
7 80 9 -1 0
Inventories:   
     Materials
17 58 24 -7 -1
18 25 55 -37
22 46 29 -7 -3
     Finished goods
18 55 19 0 4
21 34 36 -14
18 48 25 -6 -5


1Percentage may not add to 100 due to rounding.
2Diffusion Index. The diffusion index is calculated as the percentage of total respondents reporting increases minus the percentage reporting declines.
3Seasonally Adjusted Diffusion Index. The month vs. month and expected-in-six-months diffusion indexes are seasonally adjusted using Census X-12.
Note: The October survey included 127 responses from plants in Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico, and western Missouri.

Table2
Historical Manufacturing Survey Indexes
 Oct'08Nov'08Dec'08Jan'09Feb'09Mar'09Apr'09May'09Jun'09Jul'09Aug'09Sep'09Oct'09
Versus a Month Ago
(seasonally adjusted)		  
Production-19-30-18-25-24-21 -6 -3 9 2 -7 16 6
Volume of shipments-16-37-14-22-20-15 -6 -1 6 7-12 12 1
Volume of new orders-17-34-25-23-28-16-10 3 11 10 -8 10 11
Backlog of orders-20-35-27-38-35-32-30-18 0 -8-17 -8 3
Number of employees-10-18-31-40-40-41-23-13-10-13 -6 1 0
Average employee workweek-18-24-21-34-27-23-16-14 3-13 -8 11 -2
Prices received for finished product 5 0 -4-12-17-15-19-19-14-17-11 -4 -4
Prices paid for raw materials 6-11-12-26-27-29-28-20 -8 -6 0 15 18
Capital expendituresn/an/an/an/an/an/an/an/an/an/an/an/an/a
New orders for exports -4-11-14-16-11-15-15 -7 -1 4 2 5 4
Supplier delivery time 0 -6 -4 -6 -4 -5 -5 -7 -4 -5 1 4 4
Inventories:      Materials -6 -8-17-23-24-29-27-20-23-25-20-14 -1
Inventories:      Finished goods -7 1 -1 -9-20-19-15-11-14-16-11 -7 4

Versus a Year Ago
(not seasonally adjusted)		  
Production-22-35-40-51-62-62-62-52-44-50-60-46-40
Volume of shipments-14-31-30-45-60-63-60-53-45-50-57-43-40
Volume of new orders-22-45-44-50-61-68-53-47-49-48-57-43-37
Backlog of orders-26-40-34-49-53-62-56-53-47-50-52-48-44
Number of employees-22-29-38-44-53-64-60-65-54-57-66-56-47
Average employee workweek-24-36-31-44-50-55-49-54-44-41-50-40-33
Prices received for finished product 60 37 37 18 8 1 -8 -8-11-24-27-14-14
Prices paid for raw materials 72 39 20 9 -4-12-16-25-20-27-17 -9 -5
Capital expenditures 6-10 -8-25-33-45-42-48-28-24-23-24-25
New orders for exports -3 -8-12-19-24-25-22-26-17-14-16 -7 -6
Supplier delivery time 0-10 -3-10-10-14-13-19-17-13 -8 1 -2
Inventories:      Materials -1 -5-11-22-32-44-34-38-38-43-37-37-37
Inventories:      Finished goods -6 0 -3-14-25-25-20-20-23-23-25-17-14

Expected in Six Months
(seasonally adjusted)		  
Production -1-21-14-10-30-13 -1 1 13 10 24 20 29
Volume of shipments 0-18-20-10-27 -9 -1 0 11 7 16 16 25
Volume of new orders -3-17-13-13-18 -8 4 0 17 16 21 20 31
Backlog of orders 0-20-16-28-21-20 -9-10 1 8 10 2 18
Number of employees -5-23-23-26-38-37-22-14 0-10 -5 6 10
Average employee workweek -6 -9-17-30-28-17-12-13 3 -3 1 9 12
Prices received for finished product 21 5 10 -7-11 -7 -9-16 2-11 -2 3 2
Prices paid for raw materials 27 -4 0 -6 -4 -8-12 -7 12 0 29 23 34
Capital expenditures -1-18-21-21-33-24-15-10-13-12 0 -7 -2
New orders for exports -1 -1 -7-11 -8 -3 -4 -5 3 8 8 9 12
Supplier delivery time -3 -4 -5 -9 -5-11 -5 -6 -8 -9 -2 6 0
Inventories:      Materials-12-17-30-26-38-31-27-25-16-16-11 -9 -3
Inventories:      Finished goods -8-12-20-13-38-24-19-23 -9-12-16-11 -5



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