New York manufacturing index dips in May but still shows solid growth

The Empire State Manufacturing Survey general business-conditions index dipped two points in May to 24.3, but still showed the industry is generating significant growth while emerging from the pandemic.

The index — the monthly gauge on New York’s manufacturing sector — had climbed 9 points in April to 26.3, a “multi-year high.”

The May reading of 24.3 — based on firms responding to the survey — indicates business activity “continued to grow at a solid clip” in New York, the Federal Reserve Bank of New York said in its May 17 report. The result also was close to economists’ expectations. 

A positive index number indicates expansion or growth in manufacturing activity, while a negative reading on the index shows a decline in the sector. Manufacturing activity in New York has grown for 11 straight months.

The survey found 37 percent of manufacturer respondents reported that conditions had improved over the month, while 13 percent said that conditions had worsened, the New York Fed said. 

Survey details

The new-orders index moved up 2 points to 28.9, a “multi-year high,” and the shipments index climbed 5 points to 29.7, pointing to “another month of strong gains” in orders and shipments, the New York Fed said. 

Unfilled orders increased. The delivery-times index moved down 5 points, but at 23.6, it held near its record high from last month, pointing to “significantly longer” delivery times. Inventories moved somewhat higher.

The index for number of employees held steady at 13.6, while the average-workweek index climbed 6 points to 18.7, indicating ongoing gains in employment and hours worked. 

Both price indexes reached record highs. The prices-paid index rose 9 points to 83.5, and the prices-received index edged up 2 points to 37.1.

The index for future business conditions was little changed at 36.6, suggesting that firms “remained optimistic” about future conditions. 

The indexes for future new orders and shipments also held at similar levels. The indexes for future-prices paid and future-prices received remained elevated. Firms on net expect to increase employment “significantly” in the months ahead. 

The capital expenditures index came in at 25.7, and the technology spending index was 22.1.

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.