The composite index from the Kansas City Fed’s manufacturing survey declined to a reading of +2 in September. This is from a +8 reading in August and is the lowest reading since June. The above zero figure indicates economic expansion in the manufacturing sector, but at a slower pace than in August.
Chad Wilkerson, Vice President and economist at the Kansas City Fed, had to say, “We saw slightly slower growth this month, but firms were much more optimistic about industry activity in early 2014. Worker shortages remained a problem at many firms.”
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- “General labor is very difficult to find in order to fill our manufacturing positions. Educated workers are even harder to find.”
- “Our starting wage has dropped because we are having to train people that come to us with no experience or skill.”
- “We keep hearing the economy is getting better, but we have not seen an improvement.”
- “Our automotive business has done well this year, however our other business including aerospace has been flat. We are seeing some upward price pressure on our raw materials.”
- “The biggest issues we are facing are medical insurance, workers compensation insurance, and increased government regulation.”
- “We are closing our facility and moving most of the product to our Mexico plant.”
- “Demand for compressors to transfer natural gas continues to be strong.”
- “Have difficulty in hiring engineers and accountants.”
- “Our industry has lost labor force to the oil and gas industry, which is not really paying more hourly but is giving a lot more overtime.”
The Kansas City Fed is the 4th of the 5 leading manufacturing surveys conducted by Federal Reserve banks to report for the month of September. Currently, all surveys except for the Richmond Fed’s indicate economic expansion in the manufacturing sector.