Cutbacks in the energy industry are being felt by regional manufacturers, the Federal Reserve Bank of Kansas City said in a report.
The Kansas City Fed’s monthly measurement of factory activity rose slightly in February to a reading of 1. Though in positive territory, that was down from 3 in January and 8 in December, the Fed said.
“We saw a further slowing in growth this month, driven by weaker factory activity in our energy states,” said Chad Wilkerson, an economist at the Kansas City Fed.
The index measures production, new orders, employment, supplier delivery time and raw materials at factories in the Fed’s seven-state district, which covers Kansas, the northern part of Missouri, Nebraska, Wyoming, Colorado, Oklahoma and northern New Mexico.
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Wilkerson said the weakest activity was in Colorado, Oklahoma and New Mexico.
He said managers still expect factory activity to grow moderately in the months ahead.