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.