Regional manufacturing activity in March grew at its fastest pace in more than two years, the Federal Reserve Bank of Kansas City said in a report Thursday.
The report, which covers a seven-state area that includes Kansas and the northern half of Missouri, attributed the growth partly to demand for new products and to a catch-up in orders in the wake of harsh winter conditions earlier in the year.
“We saw acceleration in regional factory activity in March,” said Chad Wilkerson, a vice president and economist at the Kansas City Fed.
Wilkerson also noted that business managers’ expectations for future growth “were mostly stable at solid levels.”
The Fed’s regional index of factory orders climbed to 10 in March. That was up from 4 in February and 5 in January. The index monitors production, new orders, employment and supplier delivery time.
The Fed survey also covers Nebraska, Colorado, Wyoming, Oklahoma and northern New Mexico.
Several managers surveyed by the Fed expressed growing confidence in the strength in the economy.
“Our business has actually picked up in recent weeks,” one manager said. “Part of the increase may be seasonal, but day-to-day business is also up moderately.”
Another survey respondent noted an increase in activity in March because of new product offerings.
Several factory managers were less certain of a longer-lasting turnaround.
“Still very little domestic work, and we have seen a drop in international work,” one manager said. “Most of our international work has been in Asia, and we are noticing increased Asian competition, pricing pressures and less opportunities.”
The Fed survey follows Wednesday’s Commerce Department report that showed orders to factories for long-lasting manufactured goods rose 2.2 percent in February, the largest gain since November.