# Kansas City Fed survey shows Tenth District factory activity growing in October
> The regional composite index eased to 11 from 14, while expectations rose to 22; respondents reported rising raw-material costs and mixed ability to pass them on.
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- Section: Economy
- Country: United States
- Published: 2026-10-25T15:35:21+00:00
- Updated: 2026-10-25T15:35:21+00:00
- Event / data period: 2026-10
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Manufacturing activity in the Federal Reserve Bank of Kansas City’s Tenth District continued to expand in October, though the month-over-month composite index eased to 11 from 14 in September, the bank reported on October 22. The index had been 10 in August. It is a diffusion measure averaging readings for production, new orders, employment, supplier delivery time and raw-material inventories; it is not a percentage growth rate. The survey covers the bank’s seven-state district and should not be read as a measure of all US manufacturing.
The bank said growth slowed slightly in both durable and nondurable manufacturing, while printing activity recorded strong growth. All month-over-month indexes were positive except backlogs and new export orders. Employment, supplier delivery times and materials inventories improved from the previous month, even as most other monthly readings declined. The year-over-year composite index also moderated, from 15 to 11. Expectations for future activity remained expansionary: that composite rose from 19 to 22, its strongest reading since July 2022, and the employment-expectations index edged higher.
The release also detailed a special survey on companies’ ability to pass higher costs through to customers. Sixteen percent of firms said they could not pass on higher costs at all. Thirty-five percent said they could pass through 1–20% of those costs; 7% reported 21–40%, 16% reported 41–60%, 11% reported 61–80%, and 13% reported 81–100%. One percent said they could pass through more than all of their higher costs, while another 1% said they had reduced prices. These are shares of firms’ responses to a special question, not estimates of price increases across the district’s output.
On customer price sensitivity, 22% of respondents said customers had become much more sensitive than six months earlier, while 31% said somewhat more sensitive. Forty-one percent reported no change; 5% said customers were somewhat less sensitive and 1% much less sensitive. The responses show that producers faced differing pricing conditions: some described customers accepting pass-throughs, while others cited fuel, delivery and health-insurance costs squeezing margins and competition restraining prices. The release did not quantify total cost inflation or margins for the district as a whole.
The bank’s selected comments described a split between relatively strong shipments and softer new ordering. One manufacturer said recent shipments were supported largely by an existing backlog as customers became more cautious and ordered closer to need; another cited global trade pressures on material costs and delivery. These comments illustrate individual respondents’ experiences rather than a representative estimate for every industry. Taken together, the survey pointed to continued regional expansion, a modestly lower current-activity reading and a somewhat stronger outlook, alongside ongoing input-cost pressure and uneven ability to transfer costs to buyers.
## Data
### Tenth District manufacturing survey indicators
Indexes and special-question responses reported in the Kansas City Fed's monthly survey of manufacturing firms in the Tenth Federal Reserve District.
Methodology: Index readings are diffusion-index points, not percentages. Shares are the proportions of firms responding to the special survey questions. The source does not state the number of respondents in this release, so no sample size is inferred. All observations refer to manufacturers in the Kansas City Fed Tenth Federal Reserve District, not the United States as a whole.
| Indicator | Index points | Response share (%) |
|---|---|---|
| Month-over-month composite activity index | 11 | |
| Future-activity composite expectations index | 22 | |
| Firms unable to pass through any cost increase | | 16 |
| Firms passing through 1–20% of higher costs | | 35 |
| Firms passing through 21–40% of higher costs | | 7 |
| Firms passing through 41–60% of higher costs | | 16 |
| Firms passing through 61–80% of higher costs | | 11 |
| Firms passing through 81–100% of higher costs | | 13 |
| Firms passing through more than all higher costs | | 1 |
| Firms reporting they had to decrease prices | | 1 |
| Firms reporting customers much more price-sensitive | | 22 |
| Firms reporting no change in customer price sensitivity | | 41 |
| Firms reporting customers somewhat less price-sensitive | | 5 |
| Firms reporting customers much less price-sensitive | | 1 |
| Firms reporting customers somewhat more price-sensitive | | 31 |
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## Sources
- [Federal Reserve Bank of Kansas City]() (Source checked: 2026-10-25; Published: 2026-10-22)
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