Manufacturing activity continues to hold its own, as economic conditions continue to show growth, according to The Beige Book statistics released Friday by The Federal Reserve Board.
The 12 Federal Reserve Districts reported continued expansion in economic activity since the last report. Four Districts noted that economic growth firmed while a couple of Districts reported a slowdown in growth. Other reports said growth was moderate or mixed.
In manufacturing, eight of the 12 manufacturing Districts indicated an increase in factory output, while Chicago and Kansas City reported a slowing in expansion rates. Minneapolis indicated factory activity as mixed and Philadelphia reported a downward trend in factory production.
Energy-related equipment output was up in the Boston, Atlanta and Dallas Districts, and machine tool orders were on the rise in Chicago and San Francisco. Semiconductor sales in San Francisco were solid.
In Atlanta and Chicago, steel demand was particularly strong, while Cleveland and Chicago reported robust sales for heavy equipment sales. Heavy-duty truck production in Chicago was also reported as being strong.
However, auto industry woes caused producers of motor vehicle parts in St. Louis to plan worker lay-offs and Cleveland also reported a weak auto industry.
Several Districts reported tight labor markets, with some some noting shortages of skilled workers. Wage pressures were associated with tightening conditions in a few Districts, though other reports noted that wage pressures were in check.
Energy industry activity is continuing to show strength, as reported from the Minneapolis, Kansas City and San Francisco Districts.
In Minneapolis, the alternative energy industries are rapidly expanding and mining production is at near-capacity across the District.
Oil and gas drilling rig counts remained above year-ago levels in Kansas City, while San Francisco reported that oil and natural gas extraction continued at a rapid pace.
Although Dallas reported that activity in the oil and energy producing sector remained mostly unchanged, there was still strong demand for oil-field equipment and energy services.
Several Districts reported tight labor markets, with some some noting shortages of skilled workers.
The Boston, Philadelphia, Richmond, Minneapolis and Dallas labor markets were taut, especially for skilled workers, while the remaining Districts reported steady to stronger job growth.
Six Districts noted that labor shortages were particularly evident for professional, scientific, and other technical workers.
Modest wage growth was reported across the U.S., although faster wage growth for skilled services workers was noted by several Districts.
A shortage of of healthcare, finance and construction workers in the San Francisco District pushed wages higher. Richmond noted a sharp increase in retail wages.
In order to attract workers, some manufacturers in Atlanta raised entry-level wages.
There were no indications of increased price pressures in recent weeks.
Several Districts reported moderate energy prices, but Philadelphia, Richmond and Atlanta noted increases in raw materials prices, and Minneapolis note a rise in building materials prices.
Instances of businesses passing on higher costs were scattered across Districts; Cleveland and Atlanta said some manufacturers attempted to raise output prices while Boston reported increases in retail prices.
To view the report, click here