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Federal Reserve: Latest Manufacturing Activity Varies by Region
Each month, several Federal Reserve Banks post survey results for manufacturing activity within their districts. The June results for those released to date vary sharply by region. For instance, the production index of manufacturing activity in Texas contracted for the second consecutive month, while the nearby Tenth District bank, located in Kansas City, posted its first positive month-over-month composite since January, 2015.
The Philadelphia survey paints a similar mixed collection of indicators as Kansas City: current activity is up after two months of declines, while the six-month forecast softened. The two regions may be experiencing modest growth in manufacturing, but both surveys indicate new orders, shipments, and employment remained negative. Texas sees the same declines in those three indicators, with labor contracting for the sixth consecutive month.
Nevertheless manufacturers remain optimistic about the outlook in the Kansas City, Philadelphia and Texas surveys.
Meanwhile the Empire Manufacturing Survey results for June, released by the Second Reserve Bank in New York City, indicates a modest expansion for New York companies as current activity, new orders and shipments all increased last month compared to the previous month. Employment remained unchanged, but better than the negative findings in other surveys. As might be expected with the positive trends, the future outlook index also improved in the Second District and capital spending plans are up.
The Federal Reserve Bank of Atlanta reported May activity the first week of June, indicating its manufacturing subindex fell by 0.4 points from April figures, led largely by a 4.6 percent decline in motor vehicle and parts production. As a result, manufacturing is slightly down-year-over year by 0.1 percent.
The Chicago bank reported manufacturing down 0.1 percent from April activity, but pointed to disparity in state performance rather than sector. Decreases in Iowa and Wisconsin overpowered manufacturing’s modest 0.9 percent growth in Michigan; Illinois and Indiana were unchanged for the month.