New York manufacturing index declines over 1 point in December

Still indicates slight expansion

The Empire State Manufacturing Survey general business-conditions index dipped 1.4 points to 4.9 in December as the monthly gauge indicated New York’s manufacturing sector “expanded only to a small degree.”

The index number fell below analysts’ expectations, as Investing.com had forecast a reading of 6.9.

This follows a more than 4-point drop in the manufacturing index in November and 7-point decline in October

The December reading — based on firms responding to the survey — indicates business activity “edged slightly higher” in New York, the Federal Reserve Bank of New York said in its Dec. 15 report. 

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

The survey found 26 percent of respondents reported that conditions had improved over the month, while 21 percent said that conditions had worsened, the New York Fed said.

Survey details

The new-orders index was little changed at 3.4, indicating a slight increase in orders, and the shipments index climbed 6 points to 12.1, pointing to a “relatively substantial increase” in shipments, per the New York Fed. 

Delivery times were somewhat longer, and inventories edged lower.

The index for number of employees rose 5 points to 14.2, its highest level in over a year, pointing to “ongoing significant gains” in employment. 

The average-workweek index was unchanged at 4.8, signaling a small increase in hours worked. The prices-paid index rose 8 points to 37.1, its highest level in two years, indicating a “pickup” in input price increases. 

The prices-received index held steady at 10.0, pointing to “ongoing modest” selling price increases, the New York Fed said.

The index for future business conditions was little changed at 36.3, suggesting that firms remained optimistic about future conditions. 

The indexes for future new orders and shipments were positive and similar to the prior month’s readings. Employment levels and the average workweek are expected to “continue to increase” in the months ahead. 

The indexes for future prices paid and prices received both picked up for a third consecutive month. The capital-expenditures index came in at 16.4, and technology-spending indexes moved down to 12.1.

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.