Manufacturing activity in the region fell in May to its lowest level in nearly six years as declining international trade and the slump in the energy industry hit some businesses hard.
The Federal Reserve Bank of Kansas City reported that its monthly manufacturing index fell to -13 in May, down from -7 in April and -4 in March.
The index monitors production, new orders, employment, supplier delivery time and raw material costs for manufacturers in a seven-state area that covers Kansas, the northern part of Missouri, Nebraska, Colorado, Wyoming, Oklahoma, and northern New Mexico.
The last time the manufacturing index dipped this low was mid-2009, when the economy was in a recession.
“Factories in our region saw an even sharper decline in May than in March or April as exports fell further and energy-related producers saw another drop in orders,” said Chad Wilkerson, a vice president and economist at the Kansas City Fed.
However, he said, businesses said they still plan “modest” increases in hiring over the next six to 12 months.