Manufacturing didn’t change much in the month of December in Oklahoma, according to a December Manufacturing Survey taken by the Federal Reserve Bank of Kansas City. Oklahoma is among the several states that make up the Tenth District.
The survey results were mostly unchanged while expectations for future activity remained expansionary.
“Growth in regional factory activity cooled in December, as production and employment fell slightly,” said Cortney Cowley, Oklahoma City branch Executive and Assistant Vice President. “Looking ahead, sentiment for future activity remains positive, but the outlook for capital expenditures in 2026 is mixed.”
The survey found that price growth for finished products and raw
materials increased this month, with raw materials prices still rising faster than finished goods. But it concluded factory activity was mostly unchanged. The month-over-month composite index as determined in the survey was down from November and October.
The composite index is an average of the production, new orders,
employment, supplier delivery time, and raw materials inventory indexes. Growth eased from last month in both durable and nondurable manufacturing, particularly driven by decreases in
food, metal, and transportation equipment manufacturing.
The month-over-month indexes were mixed. Production and employment both entered slight negative territory following strong readings last month. Volumes of shipments and new orders were both unchanged from last month. The year-over-year indexes were mostly negative and lower than last month.
Production and shipments declined, and employment fell buy capital expenditures increased and new orders ticked up. Expectations for future activity remained expansionary with the composite increasing from 9 to 13, as the production, new orders, and employment indexes increased from last month.
Special Questions
This month, contacts were asked special questions about employee turnover, productivity, and capital expenditures. On net, firms reported a decrease in turnover and an increase in
productivity over the past year. About a quarter (24%) of firms reported decreased employee turnover over the past year, while 15% reported an increase and 61% reported no change. Around
a third (34%) of firms reported average productivity increased, while 15% reported a decrease and 51% reported no change.
Firms also reported mixed expectations for capital expenditures in 2026, with 11% expecting them to be significantly higher, 26% expecting slightly higher, 29% expecting no change, 16% expecting slightly lower, and 18% expecting significantly lower capital expenditures.
Selected Manufacturing Comments
“This has been a record year. The coming year is going to be questionable.”
“In 2026, we will make significant capital expenditures for productivity improvement and automation.”
“Steel markets are concerning with pricing changes and availability of aluminum.”
“We will not be spending as much in 2026 on capital outlay.”
“Our costs are way up and customer purchasing is down.”
“We would expand more aggressively if we could get satisfactory financing.”
“Domestic sales have come back after a slow 2024, however we have lost major international sales in 2025.”
“The skill level of the average employee is down from historic levels, leading to a drop in productivity. We are working on more robust training programs, process improvements, and some automation to compensate for the situation.”
“We’re pumping more out with only a small increase in head count. We have increased automation across a few different fronts.”
“Machine and home-developed software are increasing operator productivity. AI and other outside technological developments have yet to deliver productivity gains relative to their investment requirement.”
“Easier to find experienced and higher quality workers. Our production needs are up, and we seem to be hiring into a downturn. Our long-term employees are steady and gaining more
productivity. The noticeable increase is in new hires, which are higher quality.”