Factory Activity Continued to Decline at a Similar Pace
Tenth District manufacturing activity declined at a similar pace compared to last month, while expectations for future activity were mostly flat or slightly positive (Chart 1, Tables 1 & 2). The monthly index of raw materials prices continued to slow in November and decreased compared to a year ago. Finished goods price indexes increased slightly from a month ago and compared to year-ago levels. Expectations for future raw materials and finished goods prices continued to fall.
The month-over-month composite index was -6 in November, similar to -7 in October and down from 1 in September (Tables 1 & 2). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The slower pace in factory growth in November was driven by decreased activity in primary metals, plastics and rubber products, chemical, furniture, and fabricated metals manufacturing. Month-over-month indexes were mostly negative in November. The current and expected supplier delivery time indexes reached their lowest level in survey history. Indexes for year-over-year factory activity slowed slightly in November, and the composite index decreased from 24 to 19. The future composite index increased from -1 to 0 in November, with the production, employee workweek, and finished goods inventories indexes also moving into positive territory.
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This month contacts were asked special questions about employment plans and labor market conditions. About 47% of firms expected to increase employment over the next 12 months, 44% of firms expected to leave employment unchanged, and 8% of firms expected to decrease employment over the next 12 months (Chart 2). About 71% of firms planned to increase employment because expected growth of sales is high, ranking it as one of the top three factors driving employment plans (Chart 3). Other firms noted that employment plans are driven by current staff being overworked or that the firm needs skills not possessed by current staff.
Selected Manufacturing Comments
“Competition for new workers continues. While increasing wages and benefits, team members feel that it is not enough. We need relief from inflation, especially housing costs if we are to satisfy the expectations of our workers.”
“Our workload is increasing on a month over month rate with added emphasis on sales. Reducing overhead, increasing efficiency, and getting in front of the customer is paying off.”
“We are starting to see prices for raw materials level off and not have as many increases lately. Orders for our products are slowing down some, but also seasonal as well. Very concerned about inflation still increasing for what seems like very little reason at this point.”
“Have switched our focus and investment to automation vs. hiring additional employees. Process is painful and expensive as we implement automation and try to keep key employees engaged.”
“The retrenchment of financial resources is a huge issue for stabilizing/growing business.”
“Restaurant industry has been hit hard by inflation. Traffic is off by 30-40%, we have taken a position of cutting costs and working hours, and passed cost increases on to customers.”
Excel SpreadsheetHistorical Monthly Data
Excel SpreadsheetHistorical Quarterly Data