Mirroring other regional studies, the Federal Reserve Bank of Kansas City said that manufacturing activity slowed in July, with its composite index down from 14 in June to 3 in July. This news is disappointing as the June figure represented a rebound from weak May figures.
New orders, shipments, the backlog of orders, new exports, and the average workweek all contracted from the previous month. Production, inventories and the number of employees grew, but at a slower rate than in June.
Pricing pressures remained, with 49 percent of respondents citing increased costs for raw materials. Yet, only 23 percent noted higher prices for finished products.
Manufacturers remained more upbeat about the next six months relative to the current economic environment. The composite index for expected manufacturing activity was virtually unchanged from June, however. Breaking that down, predictions of higher shipments and capital expenditures were offset by slower expected growth in production, exports, and the average workweek.
Chad Moutray is chief economist, National Association of Manufacturers.
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