Regional manufacturing activity growing

OKLAHOMA CITY — Business activity in the Tenth District manufacturing sector, which includes Oklahoma, continued to grow and expectations for future activity rose slightly from last month, the April manufacturing survey conducted by the Federal Reserve Bank of Kansas City revealed.

"Regional manufacturing activity continued to expand, but raw materials prices increased sharply," said Cortney Cowley, assistant vice president and Oklahoma City Branch executive of the KC Fed. "Almost all firms reported higher transportation costs in the last two months, but most are passing through little, if any, energy-related cost increases to their customers."

Contacts were asked special questions about changes in energy costs and ability to pass through energy-related costs. Almost all of those firms (93%) reported higher transportation costs in the last two months, 7% experienced no change in transportation expenses, 43% of the firms experienced higher heating (natural gas) bills, 53% experienced no change in their heating costs, and 4% experienced lower heating costs.

More than a third (38%) of the firms contacted experienced higher electricity bills in the last two months, while 62% of firms experienced no change in their electricity costs.

Respondents also were asked about their ability to pass on higher energy-related cost increases to their customers. More than two-thirds of firms that have experienced higher energy related costs will pass on 0 to 20% of their higher energy related costs, 3% will pass on 21-40% of their costs, 8% will pass on 41-60% of their costs, 4% will pass on 61-80%, while 8% will pass on 81-100%, and 1% of firms will pass on more than 100% of their higher energy related costs.

In contrast, 6% of firms decreased their prices.

Manufacturer comments

"We have seen past-due invoices, late payments, and bad debt expense rise in 2026 above normal levels."

"Uncertainty in the business environment continues, making it difficult to formulate long term plans. Most of our efforts are being put into managing the short-term timeframe."

"Our costs are up again due to market instability. We cannot increase them again without losing customers."

"Our inventory is decreasing, but it is due to supply chain constraints. We can't get it into the warehouse fast enough. Our inbound capacity is underutilized right now. It is going out faster than we can replenish it."

"We are considering a blanket price increase mid-year to account for increases in RM and transportation."

"This month was down compared to last month because last month was an all-time record. This month was more of an average month."

"Very tough business environment."

"International demand has dropped off rapidly."

7 states

in 10th District

The KC Fed serves the Tenth 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 Kansas City Fed participates in setting national monetary policy, supervising and regulating numerous commercial banks and bank holding companies, and providing financial services to depository institutions.