Manufacturing in the Kansas City Federal Reserve Bank region dropped sharply in the May survey to levels not seen since 2009.
Production fell most deeply in energy-heavy Oklahoma and New Mexico, as the falling price of oil has caused companies in that sector to cut spending and lay off employees.
But production was also down in most other states in the region, with the sharpest declines in durable goods manufacturing, including aircraft production and metals and machinery production. Several nondurable goods plants also reported sluggish activity, particularly for plastics and food production.
The bank’s district includes Kansas, Colorado, Nebraska, Oklahoma, Wyoming, the western third of Missouri and the northern half of New Mexico.