KC Fed manufacturing data

KC Fed
  • Prior was 30
  • Composite index vs 27 prior
  • 89% of firms reported problems with suply chain disrutpions
  • Full report

This month contacts were asked special questions about labor shortages, wage pressures, and supply chain disruptions. In July, 91% of firms reported workers were in short supply, more than any time previously asked in survey history

Comments in the report:

  • "Focusing on implementing pay increases across all shops. Increasing prices to help offset the cost."
  • "Don't forget about the 25% 301 tariffs. They still exist on top of inflation and price adjustments."
  • "It would be helpful to reduce steel tariffs or work with steel producing oligopoly to reduce prices. We need more workers."
  • "We can't get enough steel to meet demand of orders. Inflation is rampant across the board."
  • "We're concerned about increasing freight rates and shortages of trucks, plus labor costs. Also, as a small business we're concerned about large companies reducing suppliers to focus on a few large-volume items, cutting down on specialty products."
  • "Sales remain strong, seeing some supply chain problems, trying to motivate workforce."
  • "A very challenging year. Lack of workers and supply chain issues have been major problems when business opportunities are increasing."
  • "Business is exceptionally slow for us, some materials we need are very hard to find."
  • "Business activity has picked up and we are in need of upgrades to certain productive assets to maintain and increase capacity."
  • "Labor shortage issues is not a new problem. Over the past two years, more time, attention and resources have been spent on hiring and retaining workers than any area of our business."
  • "My biggest concern now is looking out 6-12 months. The steel companies are forcing us to say how much steel we are taking say in March 2022... we do not know how much steel we are going to need. We could see ourselves upside down on our inventory costs."
  • "Entry level assembly workers are not readily available."

The steel comments are interesting. North American steel manufacturers are reluctant to increase capacity because tariffs could be pulled at any time.