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

The Empire State Manufacturing Survey general business-conditions index fell to 6.5 in January from 7.6 in December.

Despite the drop, it was the third straight positive reading for the index, indicating that business activity “continued to grow modestly” for New York manufacturers, the Federal Reserve Bank of New York said in a news release issued Tuesday.

The January index level of 6.5 followed revised readings of 7.6 in December, 2.2 in November, -5.5 in October, and -1.2 in September.

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

Survey details

The new-orders index fell to 3.1, pointing to a small increase in orders, and the shipments index held steady at 7.3.

Inventories edged higher for the first time in more than a year, the New York Fed said.

Labor-market conditions remained weak, though “less so than in recent months,” with manufacturers reporting a “slight decline” in employment and somewhat shorter workweeks.

Both input prices and selling prices increased more rapidly this month, with the prices-paid index climbing to its highest level in nearly three years, and the prices-received index also “jumping to a multiyear high.”

Indexes for the six-month outlook continued to convey a “high degree of optimism” about future conditions, with the index for future business conditions matching last month’s nearly five-year high.

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.

Contact Reinhardt at ereinhardt@cnybj.com