Tenth District manufacturing activity growth rebounded strongly in February, and expectations for future factory hiring and capital spending rose as well. The majority of price indexes in the survey increased moderately for the second straight month, due largely to rising food prices.
The net percentage of firms reporting month-over-month increases in production in February was 18, up from 5 in January and 7 in December (Tables 1 & 2, Chart). Production accelerated at most types of factories, but especially among producers of machinery and high-tech equipment. The overall year-over-year production index also increased from 19 to 31, and the future production index remained steady after a slight decrease last month. Although sample sizes make it difficult to draw firm conclusions about individual states, the data available suggest that production remained well above year-ago levels in all district states.
Like production, the majority of other month-over-month indexes increased significantly. The new order index jumped from 9 to 20, and the shipments index also increased for the second straight month. Growth in the order backlog index expanded for the first time in four months, rising from -4 to 9. In addition, the employment, new orders for exports, and supplier delivery time indexes all recorded solid gains. The raw materials inventory index increased to its highest level in six months, while the finished goods inventory index remained unchanged.
This is solid news. Last months overall industrial production decreased .5%. This is the second manufacturing survey that has shown strong improvement this month. The first was the NY Fed.