Kansas City's manufacturing composite index, at a very solid 11 in June, masks however trouble for orders. New orders slowed 5 points in the month to 4 which is the lowest reading since August last year. And backlog orders fell into contraction, to minus 6 from May's plus 12 for the lowest reading since November last year.
Current production, however, is very strong, at 23 this month which is also the rate for shipments. Employment, at 15, is another strength. Other indications are flat including inventories and selling prices.
June's orders are a concern and will pull down production and perhaps employment in the coming months. If orders don't snap back in July, the outlook for the Kansas City manufacturing sector could turn lower.