New York manufacturing index contracts in October

New York manufacturers reported declines in new orders and shipments, and the general business conditions index of the monthly Empire State Manufacturing Survey again indicated sector contraction in October. The index plunged 23 points to -11.9 in the 10th month of the year. This followed a 16-point climb to 11.5 in September with manufacturing activity expanding for the first time since November 2023 and hitting its highest level in 30 months. The general business conditions index is the monthly gauge of New York state’s manufacturing sector. Based on manufacturing companies responding to the survey, the October reading indicates business activity “contracted modestly” in New York state, the Federal Reserve Bank of New York said in its Oct. 15 report. A negative reading for the general business conditions index indicates a decline in the sector, while a positive index number shows expansion or growth in manufacturing activity. The Empire State Survey found “new orders fell, and shipments edged lower,” the New York Fed said. The survey report also found that “despite the weakness in general business conditions, optimism about the six-month outlook grew strongly,” per the New York Fed.

Survey details

The new-orders index fell 20 points to -10.2, and the shipments index dropped 21 points to -2.7, pointing to declines in both orders and shipments. Unfilled orders were little changed. The inventories index fell 8 points to -7.5, indicating that inventories were lower. The delivery-times index edged down to -3.2, suggesting that delivery times were somewhat shorter. The supply-availability index fell 5 points to -7.5, a sign that supply availability “worsened” in October, the New York Fed said. Despite the decline in activity, labor-market conditions improved. The index for number of employees climbed 10 points to 4.1, its first positive reading in a year, and the average-workweek index edged up to 4.7, pointing to small increases in employment levels and hours worked. Price increases remained modest but “ticked up somewhat,” the prices-paid index rose 6 points to 29.0, and the prices-received index edged up 3 points to 10.8. Though firms reported that activity declined overall this month, optimism about the outlook “grew strongly.” The index for future business activity moved up 8 points to 38.7, a multi-year high, with 55 percent of respondents expecting conditions to improve over the next six months. Capital spending plans were “modestly positive,” the New York Fed said. The Federal Reserve Bank of New York 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 state. On average, about 100 executives return responses.