03:44 PM EDT, 09/26/2024 (MT Newswires) -- Manufacturing activity in the US Midwest region slid more than expected into a deeper contraction this month as production swung back into negative territory, the Federal Reserve Bank of Kansas City reported Thursday.

The composite manufacturing index dipped to minus 8 in September from minus 3 in August. The consensus was for a minus 5 print in a survey compiled by Bloomberg. The decline was primarily driven by durable goods, the report showed.

"Regional factory activity fell moderately this month," Kansas City Fed Senior Vice President Chad Wilkerson said. "The year-over-year composite index reached its lowest level since September 2020, as production and new orders decreased substantially."

The production index swung to minus 18 from 6 month over month. New orders dipped two points to minus 14 in September while shipments fell to minus 12 from minus 1. The gauge for employment worsened to minus 11 in September from minus 7 in August, the Kansas City Fed's data showed.

The index charting raw material prices cooled to 13 from 18 month to month. The corresponding one for selling prices swung negative to minus 5 from 6 in August, indicating that finished product prices decreased slightly, the Fed branch wrote.

Six months out, the seasonally adjusted composite index edged up to 9 this month from 8 in August. Both the future production and shipment indexes dipped one point to 19 and 10, respectively. The forward-looking metric for orders held steady at 12, the report showed.

Firms indicated that they expect input price growth to ease over the next six months and selling prices to rise. The forward-looking employment metric moved up one point to 18, according to the regional Fed's data.

Earlier this month, the Federal Reserve Bank of New York reported that manufacturing activity in its region moved into growth territory for the first time since November, while the Philadelphia Fed's headline gauge of activity rebounded more than expected. In the Richmond Fed's region, manufacturing activity fell unexpectedly into deeper contraction territory.