03:49 PM EDT, 08/22/2024 (MT Newswires) -- Manufacturing activity in the US Midwest improved more than expected into shallower contraction territory this month as production swung positive, the Federal Reserve Bank of Kansas City reported Thursday.

The composite manufacturing index improved to minus 3 in August from minus 13 in July. The consensus was for a minus 9 print in a survey compiled by Bloomberg. Nondurable goods manufacturing was essentially flat while durables "fell somewhat," the report showed.

"Regional factory activity did not decline as much in August following a sharper decline last month," Kansas City Fed Senior Vice President Chad Wilkerson said. "Production rebounded somewhat while the volume of new orders and employment decreased further but are expected to grow in the next six months."

The production index rebounded to 6 from minus 12 month over month. New orders improved nine points but stayed in contraction at minus 12 while shipments jumped 17 points to minus 1.

The gauge for employment improved to minus 7 in August from minus 12 in July, the Kansas City Fed said. The index charting raw material prices ticked up one point to 18 while selling prices' rose to 6 from zero month to month. "Raw materials prices continue to grow at a faster pace," the Fed branch wrote.

Six months out, the seasonally adjusted composite index increased to 8 this month from 5 in July. The future production index climbed to 20 from 13 while orders advanced to 12 from 8. The forward-looking metric for shipments dipped three points to 11, the report showed.

Firms indicated that they expect input prices to rise six months from now and selling prices to ease. The forward-looking employment metric moved up four points to 17, according to the Fed branch's data.

Earlier this month, the Federal Reserve Bank of New York reported that manufacturing activity in its region improved more than expected to minus 4.7 in August. The Philadelphia Fed's headline gauge for Mid-Atlantic manufacturing business activity posted its first negative reading since January.