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Kansas City Fed: Manufacturers Expect Coronavirus Hit; Manufacturing Activity Expands in February

   By Dave Sebastian 
 

Manufacturing in the central part of the U.S. expanded modestly from a month ago, though more than half of survey respondents said they expect coronavirus to weigh on their operations for the rest of the year, according to a monthly survey by the Federal Reserve Bank of Kansas City.

The Tenth District Manufacturing Survey's composite index, which takes into account factors like employment and production, was 5 for February, higher than -1 in January in -5 in December.

"Regional factory activity finally expanded again in February," said Chad Wilkerson, economist at the Kansas Fed, in prepared remarks. "This was despite over 40 percent of firms reporting some negative effect from the spread of coronavirus so far in 2020."

Some survey participants reported difficulty in shipping to and from China, pressuring export sales, though 46% of firms anticipated some benefit from recently signed trade deals this year.

"The USMCA helped remove some uncertainty for our customers' spending," one respondent said. "However, Coronavirus has caused some supply chain disruption."

One respondent also said the grounding of Boeing Co.'s 737 Max aircraft has led to layoffs.

The increase in manufacturing activity was driven by both durable and non-durable goods plants, especially food and transportation equipment producers.

The Tenth District includes Colorado, Oklahoma, Wyoming, Nebraska, Kansas, the northern half of New Mexico and the western third of Missouri.

 

Write to Dave Sebastian at dave.sebastian@wsj.com

 

(END) Dow Jones Newswires

February 27, 2020 11:28 ET (16:28 GMT)

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