02:01 PM EDT, 03/28/2024 (MT Newswires) -- Manufacturing activity in the US Midwest region slumped further into contraction territory in March amid steep declines in new orders and production, according to data released Thursday by the Federal Reserve Bank of Kansas City.

The composite manufacturing index dropped to negative 7 this month from February's negative 4 print, which was the consensus in a survey compiled by Bloomberg.

"Regional factory activity fell further in March, and expectations for future activity were again steady," Kansas City Fed Senior Vice President Chad Wilkerson said. "Employment levels expanded modestly even as production and new orders contracted, and over half of firms have given mid-year wage increases recently but fewer plan to this year."

The production index swung to negative 9 in March from 3 last month, while volume of shipments dropped to negative 5 from 6. New orders plunged to negative 17 from negative 2, while the employee index fell to 6 from 8.

Factory activity "declined modestly" for both durable and nondurable goods this month, led by primary metal, electrical equipment, and paper manufacturing, the KC Fed said. "Prices continued to grow at a similar rate to previous months, with a continued spread between raw materials and finished goods growth."

Six months out, the seasonally adjusted composite index declined to 1 this month from 2 in February. The future production index was steady at 18, while the shipments component slid to 15 from 18. The future new orders gauge rose to 4 from 1, according to the Fed branch's data.

On Tuesday, the Richmond Fed said manufacturing activity in the Mid-Atlantic unexpectedly slowed this month.

Other regional manufacturing surveys released earlier this month also posted declines. Manufacturing activity in Texas and New York each fell more than expected into deeper contraction territory in March, the Dallas and New York Feds said. The Philadelphia Fed's report showed Mid-Atlantic activity slipped but stayed unexpectedly positive.