New York manufacturing index declines in June

Still indicates growth in the sector      

The Empire State Manufacturing Survey general business-conditions index fell nearly seven points in June to 17.4, as new orders and shipments both declined.

The index, a monthly gauge of New York’s manufacturing sector, had also dipped two points in May to 24.3.

The June reading — based on firms responding to the survey — indicates business activity “continued to expand in New York state, though at a slower pace than last month,” the Federal Reserve Bank of New York said in its June 15 report. A positive index number indicates expansion or growth in manufacturing activity, while a negative reading points to a decline in the sector. 

June’s 17.4 number was below the 23.0 reading expected by analysts polled by Reuters.

The Empire State survey found 39 percent of respondents reported that conditions had improved over the month, while 21 percent said that conditions had worsened, per the New York Fed.

Survey details

The new-orders index fell 13 points to 16.3, and the shipments index fell 16 points to 14.2, pointing to “ongoing gains in orders and shipments, though at a milder pace than last month,” the New York Fed said. 

Unfilled orders were slightly higher. The delivery-times index hit another record high, rising 6 points to 29.8, pointing to “significantly longer” delivery times. Inventories edged somewhat lower.

The index for number of employees held steady at 12.3, and the average-workweek index fell 4 points to 15.1, indicating “ongoing modest gains” in employment and hours worked. 

Both price indexes retreated only slightly from May’s record highs, suggesting “ongoing significant price increases:” the prices-paid index fell 4 points to 79.8, and the prices-received index declined 4 points to 33.3.

The index for future business conditions rose 11 points to 47.7, and the indexes for future new orders and shipments rose to similar levels, indicating that firms remained “very optimistic” about future conditions. 

The index for future employment rose to a record 41.7, with 45 percent of manufacturing companies reporting that they expect to increase employment over the next six months. 

The indexes for future prices paid and future prices received remained “elevated.” 

The capital-expenditures index fell 7 points to 18.4, and the technology-spending index fell 7 points to 14.9, suggesting “some slowing” in capital spending and technology spending plans.

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.