By Joshua Kirby
Factory activity in the central U.S. slowed more sharply again this month in a sign that high inflation and interest rates continue to dampen output.
The Federal Reserve Bank of Kansas City said Thursday that the Tenth District manufacturing survey's composite index was minus eight in April, falling from minus seven in March.
The Kansas City Fed survey gauges manufacturing activity in the western third of Missouri, all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming, and the northern half of New Mexico.
Nearly all components were negative, suggesting contraction on month, with output, shipments and material inventories all declining more sharply. Capital expenditure reached its lowest level in nearly four years, the survey suggested.
The reading comes after growth across the country as a whole proved weaker than expected in the first quarter, slowing from the previous period despite price pressures and employment levels running high still.
Price rises remain a major pressure for manufacturers, according to one survey respondent from the central U.S. "Inflation is not under control," the manufacturer said.
"It has slowed but is going to bubble back up again, particularly in some key commodity inputs. Prices charged to customers will have to go up," the manufacturer added.
Labor quality amid a tight jobs market remains another problem, respondents said.
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
04-25-24 1130ET
