TOPEKA, Kan. —Factory activity in the region including Kansas saw a further decline in March, according to the latest manufacturing survey from the Kansas City Federal Reserve Bank.
However, expectations for future activity are fixed said Chad Wilkerson, senior vice president at the Federal Reserve Bank of Kansas City.
“Regional factory activity fell further in March, and expectations for future activity were again steady,” 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 month-over-month composite index was -7 in March, down from -4 in February and up from -9 in January. The composite index averages production, new orders, employment, supplier delivery time, and raw materials inventory indexes.
Activity declined modestly for both durable and nondurable goods, with primary metal, electrical equipment, and paper manufacturing driving the decreases.
Production and volume of shipments decreased somewhat, while both new orders and backlogs fell sharply.
Employment levels continued to climb, but the average employee workweek declined from 2 to -11.
“The available labor pool appears to be growing. However, the quality of the candidates is still not as strong as we would like it to be,” said one manufacturer who took part in the survey.
Slight Improvement Compared to Last Year
The year-over-year index for factory activity ticked up to -4 from -8 in March 2023.
The pace of decline slowed in the supplier delivery time and raw materials inventory indexes, while volume of shipments and number of employees grew.
The production and capital expenditures indexes both had similar readings to last month.
The future composite index ticked down to 1 from 2 in March, with the production index boosting the composite at a reading of 18 and the raw materials inventory index dragging at -16.
The Federal Reserve Bank of Kansas City, surveyed the Tenth Federal Reserve District, which includes the western third of Missouri, all of Kansas, Colorado, Nebraska, Oklahoma, Wyoming, and the northern half of New Mexico.
