Manufacturing activity growth in the Tenth District (Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico, and western Missouri) rebounded strongly in February, and the forecast for future factory hiring and capital spending is expected to show growth also, according to statistics released Thursday by the Federal Reserve Bank of Kansas City.
The majority of price indexes in the survey came in with a slight increase for the second straight month, due largely to rising food prices.
The net percentage of firms reporting month-over-month increases in production in February was 18, up from five in January and seven in December.
While production grew at most types of factories, it was especially strong among producers of machinery and high-tech equipment.
The overall year-over-year production index also increased from 19 to 31, and the future production index remained steady after a slight decrease last month, the report noted.
As with the production figures, the majority of other month-over-month indexes increased significantly. The new order index jumped from 9 to 20, and the shipments index also increased for the second straight month.
Growth in the order backlog index expanded for the first time in four months, rising from -4 to 9. In addition, the employment, new orders for exports, and supplier delivery time indexes all recorded solid gains, the report said.
The raw materials inventory index increased to its highest level in six months, while the finished goods inventory index remained unchanged.
Most other year-over-year indexes increased over last month. The shipments and new order indexes both rebounded strongly after reaching their lowest levels in over three years. The order backlog index climbed from 7 to 23, and the employment index reached its highest level since the survey began in 1995.
The capital expenditures index edged up from 13 to 17, and the new orders for exports and supplier delivery time indexes remained relatively unchanged. The raw materials inventory index declined slightly, while the finished goods inventory index increased for the third straight month.
Other indexes for future factory activity increased or remained fairly stable. The future capital expenditures index reached its highest level in over two years, and the employment and order backlog indexes increased as well.
The future shipments index edged up after a decline last month, and the new orders index rose from 21 to 23. On the other hand, the future supplier delivery time index edged down from 11 to 8, and the new orders for exports index fell for the second straight month. Both future inventory indexes decreased slightly.
Most price indexes in the survey edged up slightly but generally remain lower than peaks reached over the past few years. The month-over-month raw materials price index rose from 11 to 15, and the finished goods price index also increased marginally for the third straight month, according to the report.
The future raw materials and finished goods price indexes also recorded slight gains following strong increases in January. On the other hand, both year-over-year price indexes decreased moderately.