When Esther George travels to Washington, D.C., to discuss monetary policy with her peers, she is equipped with economic information, including some of the thoughts and opinions of the residents of the Tenth District.
Although the president of the Kansas City Fed attends the meetings of the Federal Open Market Committee, the policy-setting arm of the Federal Reserve System, well-armed with formal research and data compiled by the Bank’s economists and researchers, she also has some less-formal sources of information.
The formal information is supplemented by regular face-to-face contact with bankers, business owners, community leaders and individuals across the Bank’s seven-state region. Those contacts also help inform the report George presents about conditions in the Tenth District. And while she travels extensively throughout the District, she can’t possibly talk to everyone. Fortunately, there are some reliable proxies – the hundreds of regular participants in the Bank’s many District-wide surveys.
Between the Kansas City headquarters and its Branches in Denver, Oklahoma City and Omaha, the Bank has been conducting surveys—for more than 40 years on some activities—on subjects ranging from credit conditions for agricultural lenders to conditions in the manufacturing sector and conditions faced by members of low- and moderate-income (LMI) communities. Vice President, Economist and Oklahoma City Branch Executive Chad Wilkerson says there are a number of reasons why the Bank conducts surveys.
The surveys “provide policymakers with more timely information than is available from official data, in part to help identify economic turning points,” Wilkerson said. “Regional economic data are typically released with at least a month lag time, whereas the FOMC meets every six weeks and is interested in what has happened since they last met.”
Wilkerson said the surveys provide information in addition to what is available from official data, especially about businesses’ expectations and reasons for recent changes. The surveys also are a means of contacting sources and gathering information in a time of crisis such as a weather emergency.
Participants, typically business owners, bankers or other senior-level executives, receive a questionnaire asking for recent and expected direction of change in their business activity, employment and prices as well as qualitative answers to special questions. Nate Kauffman, vice president, economist and Omaha Branch Executive, said that in the case of his Branch’s agriculture-related surveys, a participant would be “a specific individual within the Bank who is generally most involved with their agricultural lending portfolio.”
Each survey has a panel of participants selected based on their specific industry segment, geographic location and the distribution of economic activity in the Tenth District. Panels are updated annually to reflect changes in companies and in the economic activity in the region. Kauffman and Wilkerson, as subject-matter experts in their respective Branches, say they benefit from the surveys through:
- Richer regular insight and stories behind trends they have observed in data about key industries in the region, as well as about plans and expectations firms have about the future.
- Emerging regular trends or issues in various industries of which they may not yet be aware.
- Business contacts to reach out to for additional information in times of economic uncertainty.
Following a recent effort to update and enhance the survey-taking experience, the Bank this year moved to a new survey platform that is more user-friendly, including the capability to take a survey on a smartphone or pad.
To take part in a survey, participants receive an email each survey period. They have a set time (ranging from five days to two weeks, depending on the survey) to fill out and submit their survey. Survey analysts at the Bank then have access to web applications that gather, consolidate and analyze the information to produce internal and public reports about the information.
Examples of surveys the Kansas City Fed conducts
Survey of Agricultural Credit Conditions – Started in 1980, this quarterly survey asks commercial banks in the Tenth District that provide financing to agricultural producers about developments in agricultural credit conditions (including farm income, land values and loan repayment) plus special questions. About 200 participants take the survey each quarter.
Manufacturing Survey – Started in 1994, this online monthly survey asks Tenth District manufacturers about recent and expected changes in a variety of business indicators (production, employment, prices, etc.) plus special questions of interest to the Fed and/or public. About 90-100 take the survey each month.
Energy Survey – Started in 2014, this online quarterly survey asks Tenth District energy firms about recent and expected changes in a variety of business indicators (drilling, access to credit, oil prices), plus special questions. About 30-40 participants.
Small Business Lending Survey – Started in 2017, this survey is a quarterly collection of quantitative and qualitative information that can be used to understand credit market conditions for bank lending to small businesses. About 130 institutions participate.