Tenth District manufacturing continued to fall this month as expectations for future activity remained flat, according to October’s Federal Reserve Bank of Kansas City survey.
The monthly composite index — an average of the production, employment, new orders, supplier delivery time and raw materials inventory indexes — was -8 in October, unchanged from September but an eight-point drop from August. Inventories were unchanged from September while the composite index for factory activity improved one point to -11.
Production, new orders, shipment volumes and backlogs all fell, and capital expenditures cooled. The future composite index remained at 1 in October as firms’ expectations for production increased but other indexes weakened.
District firms’ finished product prices were steady as raw materials prices fell slightly for the first time since 2020. Firms expect finished product and raw materials prices to increase in the coming months. Durable goods manufacturing fell more than nondurable goods, though both sectors fell at the same pace as in September.
“Most month-over-month indexes were negative,” the KC Fed stated. “The production, shipments and order backlog indexes all declined moderately, while new orders fell significantly. Accordingly, employment declined slightly while the average workweek held steady.”
The vast majority of companies didn’t expect the recent loss of a major federal childcare subsidy to weaken their ability to hire or retain workers. Seventy-six percent of firms reported devoting more resources to train workers who did not meet skills requirements.