TOPEKA, Kan. – Manufacturing activity in the Tenth Federal Reserve district was still declining in August but at a slower rate, according to the latest manufacturing survey from the Kansas City Federal Reserve Bank.
The survey suggests prices for raw and manufactured products are both rising.
After two months of rapid decline, the activity level is beginning to reach close to neutral levels with a composite index of -3, compared to last month’s -13 and June’s -8. While this follows a year of mostly declines, it represents some level of stabilization.
“We continue to experience lower business levels than we have in the past several years. New business opportunities have come from failures of competitors, including facility closures, cyber-attack and ERP issues. There is continuing wage pressure at the shop-floor level. Election uncertainty, foreign dumping and the erosion of the spending power of consumers (higher debt/lower savings) make future business levels concerning,” according to one comment from a manufacturer who took part in the survey.
This month the survey also asked two “special questions.”
The first special question inquired about hiring and capital expenditure.
While the majority of respondents plans remained unchanged, 32% of respondents expect to hire less than they intended to at the start of the year and 19% expect to hire more.
On the same note, most expect their capital expenditure plans to stay the same while 29% expect less and 11% expect more.
The second special question asked about transportation costs. About half of contacts reported in the last six months their transportation costs have increased slightly and 61% expect their transportation costs to increase slightly in the next six months.
The tenth federal reserve district covers western Missouri, all of Kansas, Oklahoma, Colorado, Nebraska and Wyoming as well as the Northern half of New Mexico.
