Factory Activity Fell Moderately
Tenth District manufacturing activity fell moderately in June, while expectations for future remained expansionary. Price growth for both raw materials and finished products cooled somewhat this month. (Chart 1, Tables 1 & 2).
The month-over-month composite index was -8 in June, down from -2 in May and unchanged from -8 in April (Tables 1 & 2). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The decline was primarily driven by paper, plastics, machinery, and transportation equipment manufacturing. All month-over-month indexes were negative and fell from last month, except supplier delivery time and the price indexes. Production and employment fell moderately, both at -11, and new orders and employees’ average workweek declined further. The year-over-year composite index for factory activity decreased from -6 to -9, as production declined moderately and new orders fell substantially. However, employment remained expansionary from this time last year and capital expenditures were essentially flat. The future composite index ticked up from 6 to 7 in June, as firms continue to expect increases in production and employment in future months.
Manufacturing Composite Indexes
Skip to data visualization table| Date | Vs. a Month Ago | Vs. a Year Ago |
|---|---|---|
| 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 |
| Apr-24 | -8 | -12 |
| May-24 | -2 | -6 |
| Jun-24 | -8 | -9 |
Special Questions
This month contacts were asked special questions about their hiring. Around a quarter of District firms each stopped posting new positions for workers and/or reduced hours for their hired workers in the last 3 months, but only 11 percent of firms plan to reduce hours in the next 6 months (Chart 2). Additionally, only 9 percent of firms have/plan to lay off workers, and 64 percent (72 percent) of firms reported having done none of the above in the last 3 months (in the next 6 months). Firms were also asked what factors have made it difficult to hire or retain workers. 79 percent reported they cannot find workers with the requisite skills, while 40 percent reported their workers wanting more flexible hours, 23 percent each cited the availability/cost of childcare and the immigration status of their workers as a difficulty, and 17 percent cited the availability/cost of housing (Chart 3).
Selected Manufacturing Comments
“It is clear inflation has forced the customer to make ‘either/or’ decisions on how they spend their money. We see value added items in the food sector being affected strongly. Our business is not bad per se, but not as robust as we would like to see. This is both on the restaurant side as well as retail grocery.”
“Hiring qualified hourly employees continues to be a challenge.”
“Access to unskilled labor is better than it has been since the start of the pandemic. Still not great quality wise, but the number of people looking for work is robust. Still challenges on hiring and retaining office/administrative staff. Salary/wage expectations from candidates is extremely high.”
“We believe that our customers are delaying orders to us due to the high cost of capital.”
“Saw a quick slowdown in activity in the last few weeks. Projects put on hold, delays in permitting, etc.”