N.Y. manufacturers expect little improvement over the next six months

The index for future business conditions in the January Empire State Manufacturing Survey held steady at 8.0, suggesting that firms expect little improvement over the next six months.

New orders and shipments are expected to rise somewhat, while employment is expected to increase “only modestly,” the Federal Reserve Bank of New York said in its Jan. 17 survey report.

The survey’s general business-conditions index fell 22 points to -32.9 in January, representing its lowest level since mid-2020 and the fifth-worst reading in the survey’s history, the New York Fed said. The index had declined 16 points to -11.2 in December. The general business-conditions index is the monthly gauge on New York’s manufacturing sector. 

The January reading — based on firms responding to the survey — indicates business activity “contracted sharply” in New York, the New York Fed said. 

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

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. 

Survey details

The survey found 11 percent of respondents reported that conditions had improved over the month, while 44 percent reported that conditions had worsened, the New York Fed said.

The new-orders index dropped 28 points to -31.1, and the shipments index also declined 28 points to -22.4, pointing to a “steep decline” in both orders and shipments, the New York Fed said. 

The unfilled-orders index edged down to -14.3, a sign that unfilled orders were lower. The delivery-times index came in at 0.0, indicating that delivery times were unchanged. The inventories index held steady at 4.5, pointing to a small increase in inventories.

The index for number of employees fell 11 points to 2.8, “its lowest level in more than two years, signaling that employment growth stalled,” the New York Fed said. 

The average-workweek index remained negative at -10.4, indicating a decline in hours worked. Input price increases “slowed considerably,” with the prices-paid index dropping 18 points to 33.0. 

Selling price increases also moderated, with the prices-received index falling 6 points to 18.8. The capital-spending index held steady at 22.3, and the technology-spending index rose to 17.0.