Kansas City Fed reports Plunge in District's Manufacturing
3/26 10:37 AM
Kansas City Fed reports Plunge in District's Manufacturing CRANBURY, N.J. (DTN) -- The Federal Reserve Bank of Kansas City reported manufacturing activity in the Tenth District plunged to an 11-year low at -17 in March from an index reading of 5 in February, with firms in the District expecting lower prices in the next six months. The decline in manufacturing spanned plants making durable and non-durable goods. The composite index fell 17 points to -12, and future composite index plunged from 16 to -19. "Approximately 73 percent of factory contacts reported decreased outlooks for business activity and demand for products or services due to the coronavirus outbreak and recent market volatility," said the Kansas City Fed. "Margins can't get much worse. We may have to shut down," said one firm responding to the survey, and another firm reported a high rate of cancellations. Nearly 59% of District firms reported a decline in their capital expenditures outlook for 2020 or said spending plans had been put on hold. Roughly 60% of Tenth District manufacturers said customer payments have been delayed, and 54% had cash availability concerns. Uncertainty over the business climate spiked, while one firm noted many of its employees live from paycheck to paycheck, and that while they said they are doing their best to support their workers, they will need to lay people off if current conditions persist for more than a month. The Fed survey found 35% of firms in the District reported a decline or expected decline in employment. "$30 per barrel oil is a much bigger problem that people are not focusing on because of C-19," said another District firm. (c) 2020 DTN. All rights reserved.
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