KANSAS CITY, Mo. - Although manufacturing activity growth in May for the Tenth District eased slightly, it continued on a solid path, but the forecast for future factory activity is not as strong as in the past two months, according to the Manufacturing Survey released Thursday by the Federal Reserve Bank of Kansas City.
The price indexes in the survey rose higher, largely as a result of increasing energy prices, particularly gasoline.
Production at both durable- and non-durable-goods-producing plants dropped slightly. The year-over-year production index climbed slightly higher, while the future production index decreased from 41 to 30.
Shipments declined from 25 to 18 after a strong rebound in April, and the new orders, order backlog, and new orders for exports indexes also dropped.
The new orders index decreased from 33 to 27, and a drop was also seen in the shipments, order backlog, and employment indexes.
Capital expenditures edged down to 20 after increasing for three straight months, and the new orders for exports index dropped from 13 to 6.
Other future factory activity indexes generally eased but remained at strong levels. These include the shipments index which dropped from 42 to 25; and the new orders, order backlog, and employment indexes which also fell from previously high levels.
Future capital expenditures decreased for the third straight month, while the new orders for exports and supplier delivery time indexes edged up slightly. The raw materials inventory index rebounded from -15 to 2, and the finished goods inventory index rose after a decline last month.
The month-over-month raw materials index increased from 36 to 43, and the finished goods price index more than doubled from 6 to 17. The year-over-year finished goods price index matched its highest level in survey history, while the raw materials price index increased only slightly from 81 to 83.
Both future price indexes jumped higher in May, reaching their highest levels since the survey began in 1994.