New York manufacturing index dips in January, but still shows growth

Firms also remained optimistic about the future      

The Empire State Manufacturing survey general business-conditions index slipped more than point to 3.5 in January as the monthly gauge of New York’s manufacturing sector continue to point to modest growth.

The survey’s January index reading — based on firms responding to the survey — indicates business activity was “little changed” in New York, the New York Fed said. 

A positive reading indicates expansion or growth in manufacturing activity, while a negative index number points to a decline in the sector. 

The survey found 27 percent of respondents reported that conditions had improved over the month, while 23 percent indicated that conditions had worsened, the Federal Reserve Bank of New York said in its Jan. 15 survey report.

Survey details

The new-orders index rose three points to 6.6, indicating a “small” increase in orders, and the shipments index fell to 7.3, pointing to a “modest” increase in shipments. Delivery times were “somewhat longer,” and inventories held steady.

The index for number of employees fell 3 points to 11.2, a level pointing to ongoing gains in employment. The average-workweek index was little changed at 6.3, signaling another small increase in hours worked. The prices-paid index rose 8 points to 45.5, “its highest level in two years, indicating a pickup in input price increases.” This index has risen a cumulative 41 points since May. 

The prices-received index climbed 5 points to 15.2, its highest mark in a year, “pointing to an acceleration in selling prices.”

Future indicators

The Empire State survey’s index for future business conditions came in at 31.9, suggesting that firms “remained optimistic” about future conditions. The indexes for future new orders and shipments were “positive and slightly higher” than December’s readings, per the survey report.

Employment levels and the average workweek are expected to continue to increase in the months ahead. The capital-expenditures index came in at 17.9, and the technology-spending index moved down to 13.1.

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.