Kansas City Fed: Regional Manufacturing Activity "Improved Further" in August

From the Kansas City Fed: Tenth District Manufacturing Survey Improved Further

The Federal Reserve Bank of Kansas City released the August Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity improved further, and producers’ expectations also edged higher after easing last month.

“Although some District firms noted weakness in August associated with federal spending cuts and difficulties finding workers, we were encouraged to see another solid gain in our composite index and most of its components,” said Wilkerson

The month-over-month composite index was 8 in August, up from 6 in July and -5 in June ... production index remained solid at 21, and the new orders and order backlog indexes also rose moderately. The new orders for exports index edged higher from 2 to 4, and the employment index moved into positive territory for the first time in six months.
emphasis added

A few industry comments from the survey:

“More projects are being delayed by government-related entities.”

“Our defense business is down significantly.”

“Sequestration is hitting us very hard. The heavy infrastructure market is way down due to lack of federal spending.”

Earlier today Markit released their Flash PMI: Manufacturing recovery gains momentum as order growth hits seven-month high

The Markit Flash U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) signalled the strongest improvement in manufacturing business conditions in five months during August. The flash PMI index, which is based on approximately 85% of usual monthly replies, was up slightly from July’s 53.7 to 53.9, and suggested a moderate expansion of the manufacturing sector.

Firms received a larger volume of new orders in August, with a number of companies linking this to greater demand and new client wins. Moreover, the rate of growth was strong and, having accelerated for the fourth month running, the fastest since January.
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Manufacturing employment increased for the second month running in August. The rate of job creation was moderate and, having quickened slightly since July, the fastest in four months. Firms that hired additional staff generally cited increased workloads.

The Dallas and Richmond Fed regional surveys for August will be released early next week.  So far the regional surveys (and the Markit Flash PMI) suggest continued expansion for manufacturing in August.