Manufacturing and Other Business Activity Contacts report that demand and employment growth have moderated over the past two months. A number of plant closings have eliminated several hundred jobs in the District. Most notably, a paper producer in southern Arkansas plans to lay off more than 2,500 workers early next year to streamline operations after acquiring another firm. The District's textile industry continues to shrink, as an Arkansas firm announced layoffs of nearly 800 workers. Several District hospitals are starting to report cutbacks on staff because of declining government reimbursements that have strapped them financially.
Contacts note that the flourishing high-tech sector has waned as of late.
For example, in St. Louis and Louisville, a large number of nascent Internet companies have laid off workers as growth prospects have dimmed. The automotive industry, which has been experiencing slower demand, has idled workers at a few District plants for at least one week to pare inventories. A decision to upgrade equipment at General Electric Appliance Park in Kentucky, though, will save 800 jobs that were going to be cut to streamline the production of dishwashers. GE still plans to eliminate 400 jobs at the park. Tight labor markets have made the search for holiday employees difficult.