Tenth District Manufacturing Activity Was Unchanged in January
Tenth District manufacturing activity was unchanged, and expectations for future activity cooled but remained expansionary. Prices paid for raw materials increased further this month, while finished product prices growth cooled.
The Federal Reserve Bank of Kansas City released the January
Manufacturing Survey and the response of some of those managers who were surveyed, showed indications of stagnation.
” “Demand is lower.”
“Planning is very difficult with the constant changes.”
“Seeing stagnant to down results so far.”
“Regional manufacturing activity and employment levels stayed steady in January, and firms expect moderate growth in the near-term,” said Cortney Cowley, assistant vice president and Oklahoma City Branch executive. “However, contacts cited slowing domestic demand conditions, geopolitical uncertainty, and worker availability as concerns for this year.”
The month-over-month composite index was unchanged from December and down from November. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Nondurable manufacturing activity declined, while durable manufacturing activity grew slightly driven by nonmetallic mineral and metal manufacturing.
The month-over-month indexes were mostly positive. The volume of new orders and employment indexes were unchanged from last month. The year-over-year indexes remained mixed. Production grew slightly, but capital expenditures decreased and employment fell. Expectations for future activity cooled but remained expansionary with the composite decreasing . However, expectations for production and shipments increased from last month’s readings.
This month, contacts were asked special questions about labor demand and factors negatively impacting business. Over half (57%) of firms reported there were little to no changes in labor demand in the past year, while 7% shifted demand towards different roles, 14% reduced labor demand, 17% of firms increased overall labor demand, and 6% of firms are still evaluating impacts.
Firms were also asked about concerns they have in 2026. Over a third (39%) of firms reported they are concerned about domestic demand for goods/services negatively impacting their business, 8% reported they are concerned about availability of inputs, 3% reported they are concerned about credit access, and 2% are concerned about the borrowing rate.
Approximately a quarter (24%) of firms reported they are concerned about geopolitical uncertainty, 21% are concerned about worker availability, and 3% are concerned about the tax rate.
Selected Manufacturing Comments
“We are very concerned about demand for our product.”
“January is typically a slow month for us over the past 17 years of business.”
“Past six months have been strong, and the near future appears to be headed in the same direction. Steady, sustainable growth.”
“Demand is lower.”
“Planning is very difficult with the constant changes.”
“Seeing stagnant to down results so far.”
“Our quote activity is up nicely, which indicates orders should soon be rising as well.”
“Uncertainty.”
The Federal Reserve Bank of Kansas City serves the Tenth Federal Reserve District, encompassing the western third of Missouri; all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming; and the northern half of New Mexico. As part of the nation’s central bank, the Bank participates in setting national monetary policy, supervising and regulating numerous commercial banks and bank holding companies, and providing financial services to depository
institutions.