New York state manufacturing activity contracted in March

Empire State index fell to lowest level since early in pandemic    

The Empire State Manufacturing survey general business-conditions index declined nearly 15 points in March to -11.8, reaching its lowest level since early in the COVID-19 pandemic.

The index — the monthly gauge on New York’s manufacturing sector — had moved back into positive territory in February to 3.1. It plummeted in January to -0.7, ending 18 months of positive numbers including the 31.9 reading in December.

The March index number — based on firms responding to the survey — indicates business activity “declined” in New York “to its lowest level since May 2020,” the Federal Reserve Bank of New York said in a March 15 news release. A negative reading on the index indicates a decline in the state’s manufacturing sector, while a positive number shows expansion or growth in manufacturing activity. 

The survey found 24 percent of respondents reported that conditions had improved over the month, while 35 percent reported that conditions had worsened, the New York Fed said.

The March index number fell short of the consensus economists’ forecast of a reading of 5.5, according to The Wall Street Journal.

Survey details

The new-orders index fell to -11.2, and the shipments index moved down to -7.4, “pointing to declines” in orders and shipments, the New York Fed said. 

The unfilled-orders index came in at 13.1. The delivery-times index climbed 11 points to 32.7, pointing to a “substantial” increase in delivery times, and inventories rose at the “fastest pace in years.”

The index for number of employees dropped 9 points to 14.5, pointing to a modest increase in employment levels, and the average-workweek index moved down to 3.5, indicating a slightly longer workweek. 

The prices-paid index edged down 3 points to 73.8, while the prices-received index rose 2 points to a record high of 56.1, signaling “ongoing substantial” increases in both input prices and selling prices.

Firms were generally optimistic about the six-month outlook. 

The index for future business conditions climbed 8 points to 36.6. Longer delivery times, higher prices, and increases in employment “are all expected in the months ahead,” and capital spending plans “remained firm.”

The New York Fed distributes the Empire State Manufacturing Survey on the first day of each month to the same pool of about 200 manufacturing executives in New York. On average, about 100 executives return responses.