Manufacturing activity in the Tenth Federal Reserve District stayed in contraction territory in October due to a sustained decline in activity at durable goods plants, latest survey results from the Federal Reserve Bank of Kansas City showed.
The Kansas City Fed's month-over-month composite index fell to negative 3 this month from negative 2 in September. The composite index is an average of indexes measuring production, new orders, employment, supplier delivery time and raw materials inventory.
The Kansas City Fed said manufacturing activity dipped at factories that make nonmetallic mineral products, primary metal and fabricated metal products. Activity was also down for firms making machinery, computer and electronic products, and transportation equipment.
Non-durable goods manufacturing grew slightly for the second month in a row in October, the Kansas City Fed said.
Some survey respondents quoted by the Kansas City Fed in its report cited the negative impact of U.S.-China trade tensions on their businesses, while others noted difficulties in finding qualified workers.
The composite index gauging expectations for future manufacturing activity dropped to its lowest level since March 2016, falling to a reading of positive 2 from positive 5.
The Fed's Tenth District includes Kansas, Colorado, Nebraska, Oklahoma, Wyoming, the western third of Missouri, and the northern half of New Mexico.