Factory Activity Fell Again
The month-over-month composite index was -8 in April, down from -7 in March and -4 in February (Tables 1 & 2). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Activity declined somewhat for both durable and nondurable goods, with food, metals, electrical equipment, and paper manufacturing driving the decreases. All month-over-month indexes posted negative readings, except for the price indexes and new order for exports which was flat. Production, volume of shipments, supplier delivery time, and material inventories fell further from last month, while declines in new orders and backlogs moderated. The number of employees and employee workweek indexes were essentially flat at -2 and -3, respectively. The year-over-year index for factory activity decreased further to -12 from -4. Production fell further at -8 and employment declined with a reading of -7. The capital expenditures index reached -6, its lowest level since August 2020. The future composite index ticked up to 2 from 1 in April, with the production index boosting the composite at a reading of 16 and the raw materials inventory index dragging at -15.
Manufacturing Composite Indexes
Skip to data visualization table| Date | Vs. a Month Ago | Vs. a Year Ago |
|---|---|---|
| Apr-23 | -9 | -2 |
| May-23 | -2 | 6 |
| Jun-23 | -11 | -12 |
| Jul-23 | -9 | -4 |
| Aug-23 | 0 | -9 |
| Sep-23 | -7 | -12 |
| Oct-23 | -6 | -11 |
| Nov-23 | -2 | -9 |
| Dec-23 | -1 | -8 |
| Jan-24 | -9 | -12 |
| Feb-24 | -4 | -8 |
| Mar-24 | -7 | -4 |
| April-24 | -8 | -12 |
Special Questions
This month contacts were asked special questions about workforce training and hiring priorities. Two thirds of firms have devoted more resources to training workers that do not meet skill requirements, with 24% devoting significantly more resources and 43% devoting slightly more. Additionally, 31% reported no change in the resources devoted to training and 2% devoted less resources (Chart 2). Firms were also asked about their biggest priority in hiring over the next six months. 41% reported hiring entry-level workers is their biggest priority, while 48% said mid-level workers, 8% said senior-level workers, and 3% of firms reported they are not hiring (Chart 3).
Selected Manufacturing Comments
“Increase in sales and decline in inventories for this month over previous month was weather related.”
“We are still having some supply issues and the same issues continue in finding productive, reliable workers.”
“We need good workers in low- and mid-level skill set. We just can't find enough in our area. We currently have 9 positions open and are struggling finding the right skill level.”
“Inflation is not under control. It has slowed but is going to bubble back up again, particularly in some key commodity inputs. Prices charged to customers will have to go up. Labor is hard, but there are more workers out there vs. two years ago. But, the quality is low. Lots of churn to get the folks you want to keep.”