Kansas City Fed: factory hiring flat as new orders climb
- The Kansas City Fed’s manufacturing composite index rose to 14 in September.
- The employment index held at 0 for a second month.
- The new orders index climbed to 24 from 16 in August.
- 11% of surveyed firms said they are planning headcount cuts.
MISSOURI, UNITED STATES — Manufacturers in the Tenth Federal Reserve District reported rising activity in September while holding hiring flat, as new orders climbed and one surveyed firm said it would automate to limit new hiring.
The month-over-month composite index rose to 14 from 10 in August and 9 in July, while the seasonally adjusted employment index stayed at 0 for a second straight month.
Orders rise while employment holds flat
The figures come from the Federal Reserve Bank of Kansas City‘s monthly survey of manufacturers across its seven-state region.
The new orders index climbed to 24 from 16, and the production index reached 20, the survey’s data tables showed.
Compared with a year earlier, the employment index was negative, at -3.
Expectations for employment six months out eased to 8 from 12 in August.
“We have an increase in new business for the next year of over 30%. We will try to automate as much as possible to minimize the need for additional headcount,” one respondent said.
Few firms are planning headcount cuts
In special questions, 11% of firms said they are planning headcount cuts, and 12% said they would not reduce headcount at all.
The largest group, 26%, said sales would have to fall 5% to less than 10% before they reduced headcount.
Price pressures also rose, with the finished products price index reaching its highest reading since July 2022.
“Business continues to weaken and cost continue to rise. Our workers deserve higher wages, but the profit isn’t available to support more,” another respondent said.
Flat factory hiring alongside rising orders points to employers leaning on automation and existing staff, a pattern that can shift support functions toward offshore outsourcing and business process outsourcing (BPO) partners. When manufacturers try to grow output without new hires, buyers comparing the top BPO companies worldwide can look for providers that absorb administrative work as volumes rise.
The Kansas City Fed’s data confirm that September’s gains in orders and production did not translate into new factory jobs.
For enterprise buyers facing rising volumes and input costs, holding headcount flat puts more weight on automation and outside support.
Offshore BPO operations that scale with demand are positioned to support manufacturers growing without adding staff.
Related news
- AI-exposed jobs see faster pay growth: Indeed · 23 Sep
- U.S. retail hiring sends mixed signals: Indeed Hiring Lab · 12 Sep
- U.S. payrolls beat big with 162,000 August jobs · 8 Sep
Disclosure: Outsource Accelerator uses AI tools in the backend of its editorial workflow. Every article is reviewed and verified by a human editor before publication.
Stay ahead of the outsourcing industry. Join thousands of business leaders who rely on Outsource Accelerator for the news, trends, and expert insights that matter. Subscribe to our free newsletter and never miss an update.
