Weakness in agriculture-related businesses has left manufacturing growth “sluggish” in the region, according to a survey reported Thursday by the Federal Reserve Bank of Kansas City.
Still, growth continued as measured by an October index generated from the survey of manufacturing companies across seven states, including Kansas and western Missouri.
October’s growth in manufacturing extended a streak that began with the January report. October’s reading was 4, which shows growth, but it was down from 6 in September.
Moody’s Analytics economist Andrew Davis said the trend may be weaker than the Kansas City Fed’s report suggests.
Davis said he focused on parts of the survey that correspond with information gathered in the widely watched national Institute of Supply Management survey of purchasing managers each month.
On this basis, Davis said, the Kansas City Fed’s feedback was less optimistic and reinforced a trend toward weaker growth in manufacturing in the Fed district. The Kansas City Fed’s survey also covers Colorado, Nebraska, Wyoming, Oklahoma and northern New Mexico.
“The answer is not good,” Davis said of the narrower focus. “It’s the lowest reading of the year.”
Davis said the region’s economy overall is doing well, though its manufacturing industries are lagging.
“It’s not an alarming issue, but it just confirms to me that this is an area that has not accelerated or picked up strength over the last couple of quarters,” Davis said.