The White House might be celebrating the 2.6% growth in the economy from July through September, but a new Kansas City Federal Reserve Bank report shows a decline in manufacturing activity in the Tenth District that includes Oklahoma.
The October Manufacturing Survey released by Chad Wilkerson, vice president and economist at the Bank said there was also a decline in expectations for future manufacturing activity.
“Regional factory activity declined slightly in October,” said Wilkerson. “Indexes fell considerably for production, shipments, and new orders; however, firms still reported slight gains in employment.”
The slower pace in factory growth in October was driven by decreased activity in computer and electronic, wood, primary metals, and plastics and rubber manufacturing. Most month-over-month indexes decreased in October, except for supplier delivery time and finished goods inventories.
The monthly index of raw materials prices slowed in October and continued to decrease compared to a year ago. Finished goods price indexes decreased slightly from a month ago and compared to year-ago levels. Expectations for future raw materials and finished goods prices also slowed moderately.
In October, 65% of firms reported devoting significantly or slightly more resources to training workers in order to meet skill requirements, while 33% reported no change. Due to labor shortages, 36% of firms reported investing or planning to invest in labor-saving automation strategies at a faster pace than in the past.
Sampled responses varied from industry to industry:
“Prices paid for commodities still through the roof. No relief in sight. Labor is still hard to find. Economy is still decent – lots of future growth opportunities sitting out there – but they will be hard to support with labor market.”
“Overall workforce remains good. A second all-employee salary increase occurred in September which is over and above normal raises.”
“We are promoting productivity and efficiency. As I said, doing more with less. We are getting a good response from our workforce.”
“Supply chain is better, overseas shipments are cheaper and faster, helping reduce prices paid for materials.”
“We are still struggling with finding competent and reliable employees. It is severely inhibiting our ability to expand our operations.”