Service activity slows in 10th District

The Federal Reserve Bank of Kansas City released its monthly survey Friday, which revealed t hat 10th District services declined modestly in October, while expectations for future growth expanded.

“Regional services activity declined slightly in October after r i si ng i n August and

S e p t e m b e r , ” s a i d C h a d Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City's Oklahoma City branch. “This continued a trend of up and down activity in the sector in 2019.”

The Federal Reserve Bank of Kansas City s er ves t he 10th Federal Reserve District, encompassing the western third of Missouri; all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming; and the northern half of New Mexico. As part of the nation's central bank, the Bank participates in setting national monetary policy, supervising and regulating numerous commercial banks and bank holding companies, and providing financial services to depository institutions.

The Kansas City Fed's monthly Survey of 10th District Services provides information on several indicators of activity including sales, revenue, employment and capital spending, while identifying changes in prices of input materials and selling prices.

Survey participants represent a variety of industries, including retail and wholesale trade, automobile dealers, transportation, information, high-tech and professional services, real estate, education, restaurants, health services, tourism and other services firms.

This month contacts were asked special questions about capital investment decisions and difficulties hiring employees.

Nearly 41% of regional manufacturing contacts indicated that future demand expectations were the primary driver for capital investment decisions. More than 36% of contacts reported the need to replace existing plant and equipment was the primary driver for investment decisions, and another 15% said economic/ political uncertainty was the main factor.

In regards to filling positions, 48% of firms said they had difficulty hiring workers over the past three months because of a lack of qualified applicants.

“Immigration issues are impacting our ability to grow,” one survey participant said. “High-end tech workers' H1 visa issues are shortening the supply and making it hard to grow.”

Only 23% of contacts noted they did not have difficulty hiring workers over the past three months.

“So much economic uncertainty ,” another participant said. “Tariffs, military action, lack of direction in White House.”