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Economy in Brief

Kansas City Fed Survey Depressed by Weather but Expectations Suggest Recovery
by Tom Moeller  February 27, 2014

The Federal Reserve Bank of Kansas City reported that its February Composite index of 10th District factory sector activity dipped to 4 from 5 during January. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The Bank cited severe winter weather as responsible for holding back the current index component readings. Shipments and production, nevertheless, improved versus January and versus one year ago.

Expectations component readings remained above current activity indexes, suggesting future improvement. Nevertheless, in February the index of expected business conditions in six months retreated as the new orders, production and employment components fell. Remaining near its recovery high was the index for capital expenditures in six months. Also, inventory levels were viewed as being higher in six months. These projected improvements were offset to some extent by a lower reading for expected exports.

The diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. The survey included 94 responses from plants in Colorado, Kansas, Nebraska, Oklahoma, Wyoming northern New Mexico. Data for the Kansas City Fed Survey can be found in Haver's SURVEYS database.

Kansas City Federal Reserve Manufacturing Survey Feb Jan Dec Y/Y 2013 2012 2011
Conditions Versus One Month Ago (% Balance) 4 5 -3 -8 0 4 9
   New Orders Volume 5 5 1 -23 1 0 5
   Number of Employees 3 11 0 2 -2 5 11
   Prices Received for Finished Product 7 8 2 4 3 5 12
Expected Conditions in Six Months 11 26 15 5 10 12 16
   New Orders Volume 23 35 24 15 18 21 24
   Number of Employees 6 29 15 3 9 13 17
   Prices Received for Finished Product 25 30 18 24 24 24 29
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