By Evan Sully
(Reuters) – Manufacturing activity in several Midwestern and Rocky Mountain states ticked up in June, driven by demand for durable goods such as fabricated metals and machinery, the Federal Reserve Bank of Kansas City said on Thursday.
The Kansas City Fed’s monthly survey of manufacturing activity across its district showed its composite index rose to 27 in June from 26 in May, edging back toward April’s record-high level. Meanwhile, the bank’s measure of production in the district – which covers Kansas, Oklahoma, Nebraska, Colorado and Wyoming and parts of Missouri and New Mexico – declined to 30 from 32, also after reaching a record high in April.
“Manufacturers reported that stronger demand and growth were primary factors supporting business investment and capital spending for the remainder of 2021,” the survey said. “On the other hand, manufacturers also reported the lack of availability of parts and employees were primary factors restraining business investment and capital spending for the rest of 2021.”
Manufacturing employment strengthened in the district and price pressures eased a touch but remained near historically high levels.
The bank’s measure of the number of employees rose to 26 in June from 20 a month earlier. The gauge of prices paid for materials pulled back to 79 from May’s record-high 86, and the index for prices received for finished products fell to 48 from 51.
Looking ahead, the bank’s future composite index reached a new survey record high, increasing from 33 to 37 in June.
Factories have struggled to keep up with demand in recent months as the U.S. economy shows signs of emerging from the COVID-19 recession and consumers flush with cash from recent stimulus programs ramp up spending.
The Commerce Department reported on Tuesday that orders for durable goods rose 2.3% in May.
(Reporting by Evan Sully; editing by Jonathan Oatis)
