Kansas City Fed Tenth District composite manufacturing index rose to 5 in February (Jan: 0), slight improvement in factory activity.

• The composite index increased from 0 in January and December to 5, indicating modest expansion after flat readings.

• Production and new orders grew moderately while employment declined modestly, showing uneven improvement across components.

• Durable manufacturing edged higher, driven by primary metal and electrical equipment, while nondurable activity declined further.

• Most year-over-year indexes were positive except employment, backlog of orders, and finished goods inventories, indicating selective weakness.

• Price growth for finished products and raw materials remained positive but eased slightly from last month.

• Future expectations rose with the composite index increasing to 15 (from 7) and employment expectations edging higher.

• Firms reported mixed cost pass-through ability: 30% can pass through only 0–20% of costs currently and 28% can pass through 80–100%.

• Nearly half of firms (46%) reported no change in pricing frequency versus last year, while 48% reported changing prices more often.

Tenth District manufacturing activity was unchanged in January, with the composite index at 0 for a second straight month and expectations still expansionary despite cooling momentum.

• The month-over-month composite index held at 0 in January (Dec: 0; Nov: 7), indicating flat overall activity after slowing from late-2025 strength.

• Key MoM components were steady: new orders remained at 0 (Dec: 0) and employment remained at 0 (Dec: 0), suggesting demand and hiring conditions were largely unchanged.

• The year-over-year indexes were mixed, with production slightly positive while employment weakened further to -11 (from -7), pointing to softer labor conditions versus a year earlier.

• Capital expenditures (YoY) declined sharply earlier but improved in the latest reading, rising to 4 from 14, though still indicating weaker capex momentum compared with prior strength.

• Prices paid for raw materials increased further in January, while prices received for finished goods cooled, implying input cost pressures strengthened even as output price growth moderated.

• By industry mix, nondurable manufacturing activity declined while durable activity grew slightly, led by nonmetallic mineral and metal manufacturing.

• Future expectations cooled but stayed expansionary: the future composite index slipped to 7 (from 10), though expectations for production and shipments increased from last month.

• Special questions showed labor demand was mostly stable over the past year (57% little to no change), while top 2026 concerns centered on domestic demand (39%), geopolitical uncertainty (24%), and worker availability (21%).

Tenth District manufacturing activity was little changed in December, with the composite index at +1 (Nov: +8; Oct: +6), indicating cooling momentum after recent gains.

• The month over month composite index slipped to +1 in December from +8 in November, reflecting softer conditions across both durable and nondurable manufacturing.

• Production fell to -3 (Nov: +18), while employment declined to -4 (Nov: +11), showing a pullback after strong readings in the prior month.

• Volumes of shipments and new orders were unchanged at 0, indicating flat demand and output flows relative to November.

• Backlogs of orders remained negative at -2 (Nov: -4), suggesting continued limited accumulation of unfilled demand.

• Prices received for finished goods rose to +22 (Nov: +13), and prices paid for raw materials stayed elevated at +40 (Nov: +36), with input costs continuing to rise faster than selling prices.

• Supplier delivery times increased to +8 (Nov: +15), remaining positive and consistent with some delivery delays.

• Expectations for future activity improved, with the future composite index rising to +13 (Nov: +9), as future production, new orders, and employment indexes all strengthened despite mixed expectations for 2026 capital expenditures.

The Tenth District Manufacturing Composite Index rose to +8 in November (from +6 in October), marking a third straight month of strengthening factory activity across both durable and nondurable industries.

• Production increased to +18 (Oct: +15), showing a stronger pickup in output, led by machinery, furniture, food, and printing manufacturing.

• Shipments rose to +12 (Oct: +4), indicating firmer movement of finished goods compared with last month.

• New orders held at +2 (Oct: +1), suggesting modest demand growth even as backlogs remained weak at -2 (Oct: -1).

• Employment improved to +7 (Oct: +1), while the average employee workweek ticked up to +1 (Oct: -3), pointing to better labor utilization.

• Prices received eased to +14 (Oct: +19) and prices paid softened to +34 (Oct: +37), showing slightly slower cost and selling-price pressures.

• Inventories of materials declined to -1 (Oct: +1), while finished goods inventories increased to +3 (Oct: +2), reflecting mixed stock levels across inputs and outputs.

• The future composite index dipped to +9 (Oct: +14), though firms’ expectations for future new orders (+6) and future employment (+11) both improved, keeping the near-term outlook positive.

The Kansas City Fed’s Tenth District Manufacturing Composite Index rose to +6 in October 2025 (from +4 in September and +1 in August), marking the strongest pace of growth since early 2023 as both durable and nondurable sectors expanded.

• Production increased sharply to +15 (Sep: +4), and shipments rose to +15 (Sep: +6), indicating stronger factory output and goods movement.

• New orders held steady at +5 (Sep: +5), while backlogs remained soft at -13 (Sep: -13), showing modest demand recovery but persistent order weakness.

• Employment edged down to +2 (Sep: +3), while the average workweek turned negative at -3 (Sep: +3), suggesting slower labor utilization despite hiring gains.

• Prices received rose to +21 (Sep: +19) and prices paid for raw materials climbed to +43 (Sep: +42), reflecting slightly stronger input and output cost pressures.

• Supplier delivery times were steady at +11, and materials inventories increased to +11 (Sep: +7), while finished goods inventories improved to +1 (Sep: -3).

• The future composite index jumped to +14 (Sep: +7), showing stronger optimism for six-month activity, though expectations for new orders and employment were unchanged.

• Special survey results showed 55% of firms saw lower profit margins this year, while 43% expect margins to increase slightly in 2026. About one-third (33%) reported either starting or expanding AI use since early 2025.

The Kansas City Fed’s Tenth District Manufacturing Composite Index rose to +4 in September 2025 (from +1 in August), signaling a modest pickup in activity.

• Production improved to +4 (from 0), showing a further gain after flat output in August.

• Shipments eased slightly to +3 (from +6), but remained in positive territory.

• New orders were steady at +2, holding onto modest growth after improving from negative levels earlier in the summer.

• Backlogs remained weak at -13 (from -15), pointing to continued softness in demand pipelines.

• Employment strengthened to +3 (from -11), indicating stabilization in labor conditions.

• The average employee workweek rose to +3 (from -9), reflecting an increase in hours worked.

• Prices received for finished products edged down to +19 (from +21), while prices paid for raw materials moderated to +37 (from +41).

• New export orders weakened to -19 (from -15), showing persistent contraction in external demand.

• Materials inventories slipped to +1 (from +8), while finished goods inventories improved slightly to +2 (from -3).