The growth of manufacturing activity in Middle America accelerated in February, data from a survey by the Federal Reserve Bank of Kansas City showed Thursday.
The Tenth District Manufacturing Survey’s composite index climbed to 24 in February, up from 17 in January. Economists had forecast a mild decline to 15.
The Kansas City Fed covers the western third of Missouri, Kansas, Colorado, Nebraska, Oklahoma and Wyoming, and the northern half of New Mexico.
The advance is even more startling considering the severe winter conditions that prevailed for much of the country in February.
“Most businesses reported more production and shipments, despite some difficulties due to the extreme weather events recently,” said Kansas City Fed economist Chad Wilkerson.
“Last week’s weather in the southwest took us out of production for 4.5 days due to electricity/natural gas debacle,” said one of the manufacturers responding to the survey.
This was the second consecutive monthly rise for the index.
The Kansas City Fed said the growth was driven by durable goods plants, specifically by primary and fabricated metals, machinery, and transportation equipment.
“Month-over-month indexes for production and employment increased at a faster pace in February,” the Kansas City Fed said.
For the first time since the pandemic struck, year-over-year factory indexes were positive. The Fed noted that employment continued to lag year-ago levels.
The future composite index rose further to 34 up from 24 in January, with an uptick in capital spending plans.