Kansas City Fed: Regional Factory Production Now Net Positive

For the first time in 10 months the Tenth Federal Reserve District is reporting factory production that is now net positive. The Tenth Federal Reserve District encompasses Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico, and western Missouri.

The Kansas City Fed released its manufacturing report on Thursday and claimed that "manufacturing activity showed signs of a rebound in June." The report also shows that firms in the region have net positive expectations for future factory activity.

The net percentage of firms reporting month-over-month increases in production in June was 9, up from -3 in May and -6 in April. The positive production netted increases in both durable and non-durable-goods production plants.

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Source: Kansas City Fed

Additionally, over half of companies in the region are now reporting satisfaction with their inventory levels.

Large increases also registered in future factory activity indexes from May to June. The future production index rebounded from 1 in May to 13 in June. Sub-indexes for future shipments, new orders, and order backlog all jumped up.

This positive report from the 10th district follows a string of positive manufacturing reports from across the country. Last week the Philly Fed reported its highest activity reading since September 2008. On Tuesday the central Atlantic regional Fed report showed manufacturing advancing considerably faster in June over May. And a week from Monday there was good news lurking under the June headlines for NY's empire index.

Comments

[Old Trader:]

"Additionally, over half of companies in the region are now reporting satisfaction with their inventory levels."

Doesn't the quote above, taken from the article bode poorly for production going forward? If these companies are "satisfied with their inventory levels", they can scale back on their ordering, unless of course, sales improve. I suspect that the string of positive mfg. reports across the country are the result of inventories being slashed to the bone.

Jun 29 06:48 PM