Fed Survey Finds Positivity Among Manufacturers

A survey of manufacturers in a seven-state region reveals the most positive outlook in the survey’s 23-year history. 

The Federal Reserve Bank of Kansas City conducted the survey in Nebraska, Kansas, Colorado, Oklahoma, Wyoming and adjacent parts of Missouri and New Mexico. Eighty-one executives participated, and their responses generated an index of 20, which is the highest level since March 2011. Indexes above zero show economic growth. 

“That’s coming off a couple bad years,” said economist Chad Wilkerson of the Federal Reserve Bank of Kansas City, Mo. “It’s a rebound from a weak position. Nevertheless, the size of the index has been remarkable the last couple months, and the speed has been a little surprising.” 

Wilkerson said a rebound in energy prices and stabilized farm prices have helped, but manufacturers’ optimism also is tied to their expectations for the Trump administration’s policies. 

This level of optimism is especially remarkable given uncertainties over trade and immigration, he said. In recent months, activity has caught up with expectations. 

“Orders have actually begun to come in,” Wilkerson said, “so production has begun to pick up.” 

The survey is one piece of economic information that leaders of the Federal Reserve System consider when they set key interest rates. In general, a rising manufacturing sector would be a factor suggesting that the economy could continue growing at higher interest rates, as the Fed has suggested this year. 

The survey includes questions about production, new orders, employment, suppliers’ delivery time and raw material inventories.

Source: Omaha World-Herald