Manufacturing increases in Federal Reserve’s 10th District

August manufacturing activity in the Oklahoma region grew in November, while expectations for future activity moderated slightly, according to a report released Friday by the Federal Reserve Bank of Kansas City. Price indexes were mixed, but the month-over-month composite index was 15 in November, up from 8 in October and 13 in September. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes in the Federal Reserve’s Tenth District, which encompasses the western third of Missouri; all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming; and the northern half of New Mexico. “This is the middle of our busy season, and we will likely see a slowdown in Q1 and Q2,” a manufacturer said in the survey. “We are planning to use that time to train new hires for operator positions.” The increase in factory growth was driven by both durable and nondurable goods producers, particularly metals, aircraft, food and plastics. The production, shipments, new orders, and order backlog indexes increased to their highest levels since the middle of the year. New orders for exports index rose from 3 to 6, while the employment index lessened. The materials inventory index rose from 10 to 15 and the finished goods inventory index also increased. Most year-over-year factory indexes were lower than a year ago. The composite index eased from 45 to 40, and the production, shipments, new orders and order backlog indexes also decreased. In contrast, the employment index was unchanged, and the capital expenditures index increased from 30 to 48. The finished goods and raw materials inventory indexes both rebounded after falling last month. “Tariffs and threats of tariffs are still a big financial concern,” one manufacturer said in the survey. “At this stage of the economic expansion, labor availability and the uncertainty around tariffs are the significant but manageable problems we face,” said another manufacturer. Future factory activity expectations were further moderated. The future composite index eased from 21 to 16, and the future production, shipments, new orders, and order backlog indexes also fell. However, the future employment index increased from 15 to 20, and the future capital expenditures and new orders for exports indexes also increased. Price indexes were mixed in November. The month-over-month finished goods price index increased from 19 to 23, and the raw materials price index increased from 33 to 41. The year-over-year raw materials price index eased from 78 to 75. The future raw materials price index rose from 37 to 46.