Manufacturing activity fell sharply in August according to the August survey released Tuesday by the Federal Reserve Bank of New York.
The general business conditions index dropped for the second consecutive month from 16.6 in July to 10.3 in August. The unfilled orders index fell below zero for the first time in several months and the inventories index remained negative for the third consecutive month.
Employment indexes were positive, but remained low and future indexes dropped from July numbers, noting a decline in the level of optimism for the six-month outlook.
The cost of employee benefits was top of the list of major problems for manufacturers, followed closely by workers’ compensation costs and the cost of resources.
Both the prices paid index and the prices received index dropped slightly. The prices paid index fell from 50.5 to 44.6 and the prices received index fell to 14.9.
Manufacturers noted finding qualified workers as a primary concern as well as cost of credit. Both issues were noted higher as compared to the same time period a year ago. One in five firms reported issues filling a wide variety of job openings, but half the respondents noted difficulties filling job openings requiring special skills.