Tenth District manufacturing activity declined in December, according to a recent Federal Reserve Bank of Kansas City survey.
Expectations for future activity were mainly flat or slightly positive, according to the report. The composite index, an average of the indexes for production, new orders, employment, supplier delivery time and raw materials, was -9 in December, a fall from -6 in November. The monthly index for employment fell three points to zero, its lowest mark since 2020 but still indicative of flat unemployment in December.
Indexes for year-over-year factory activity slowed this month, including the composite index, which fell four points to 15. The future composite index increased two points to 2 in December. The expanded volume of the new orders index was in positive territory for the first time in two months.“The slower pace in factory growth in December was driven by decreased activity in printing, wood products, machinery manufacturing and food manufacturing,” the report stated. “Month-over-month indexes were mostly negative in December.”
The monthly index of raw materials prices continued to fall in December, but prices were still higher than a year ago at most firms and are expected to rise in the coming months. Price increases for finished goods fell in December, and more firms anticipate those costs will further ease in the coming months.
Forty-three percent of firms said that wages will rise faster compared to the previous 12 months. Only 23 percent expect wages to increase at a similar rate, and 35 percent anticipate they will rise at a slower clip.