The Kansas City Fed’s Manufacturing Production Index rose to 5 in June 2026 from -10 in May, the highest level since August 2023, signaling a rebound in factory activity. The improvement was driven by stronger output in nonmetallic mineral and petroleum product manufacturing, partially offsetting ongoing weakness in metals and transportation equipment. Production and shipments ticked up modestly, while new orders and employment declined. Backlogs continued to shrink, reflecting persistent demand softness. In turn, price pressures intensified, particularly for raw materials, forcing manufacturers to increase their selling charges. Despite subdued current conditions, the future composite index rose to 9 from 5, as firms anticipate a pickup in production and orders over the next six months.