BUFFALO, N.Y. — On Monday the New York Federal Reserve released its monthly manufacturing survey. The Fed reported the second-biggest drop in manufacturing activity since the survey was introduced in 2006.
"Manufacturing activity took a significant turn south, it's only been for one month, but it's certainly a significant thing," said Richard Deitz, an economic research advisor at the New York Federal Reserve. "There's been a lot of volatility in recent months, a lot of ups and downs, but it's kind of hovering around activity being flat."
Deitz said that according to respondents of the survey, the main issues facing manufacturers across New York are labor shortages and supply chain issues.
"One month, they may have what they need to produce all that's being demanded from them," Deitz said. "But another month, they may have trouble getting the supplies they need."
The labor shortages are definitely being felt in Western New York, according to the Buffalo Niagara Manufacturing Alliance.
"We've got, right now, approximately 3,000 open slots for skilled employees in just the Western New York area alone," said Peter Ahrens, president of the BNMA. "If that continues, it will threaten over time our ability to increase productivity and compete nationally to fulfill orders and get new business."
According to the survey from the NY Fed, the manufacturing index dropped 42 points in July, -31.3 on the index scale.
"It's not even just some parts of the manufacturing sector, at least this month, it's been pretty widespread," Deitz said.
The silver lining, according to Deitz, is this is only one month's worth of data. While there had been volatility throughout the year, a true pattern of manufacturing disruption has yet to be determined.
"It's only one month so far," Deitz said. "It's hard to know if this is something that's just happened this month, and things are going to kind of correct a little bit in the opposite direction next month.
While Western New York has a lot of positions to fill on the labor side of the business, actual business is doing well said Ahrens.
"The state of Western New York manufacturing is good, and I feel it's going to be solid for the foreseeable future," Ahrens said.
"We need to get these individuals, these younger people to understand that being a doctor, a lawyer, and accountant isn't for everybody, if you like working with your hands, taking on a skilled trade you can graduate with a two-year degree at 20 years old with no student loan debt, making a decent living wage and a great career path."