The Empire State Manufacturing Survey general business-conditions index slid further into negative territory in October, hitting its lowest level since May. The index fell 5 points to -6.8 in October as manufacturing conditions weakened for a third straight month. It’s the index’s weakest reading since the -9.0 level it reached five months ago. The results […]
The Empire State Manufacturing Survey general business-conditions index slid further into negative territory in October, hitting its lowest level since May.
The index fell 5 points to -6.8 in October as manufacturing conditions weakened for a third straight month.
It’s the index’s weakest reading since the -9.0 level it reached five months ago.
The results of the October survey indicate that business activity “continued to decline” for New York manufacturers, the Federal Reserve Bank of New York said in a news release issued Oct. 17.
The October reading of -6.8 followed index levels of -2.0 in September, -4.2 in August, and 0.6 in July.
A negative reading indicates a decline in manufacturing activity, while a positive number on the index indicates expansion or growth in the sector.
The survey found 27 percent of New York manufacturer respondents reported that conditions had improved over the month, while 33 percent said that conditions had worsened.
Manufacturers in New York and across the U.S. have been buffeted by some strong headwinds of late. An Associated Press article stated manufacturers have been “struggling” with a strong dollar, which makes their goods more expensive abroad, and “weak investment in machinery by businesses cautious” about the global economic outlook.
Inside the survey
The new-orders index increased “slightly” but remained negative at -5.6, indicating that orders “continued to decline,” and the shipments index rose 9 points to -0.6, evidence that shipments were “essentially flat,” the New York Fed said.
The unfilled-orders index was little changed at -10.4, and the delivery-time index fell to -11.3, signaling shorter delivery times.
The inventories index held at -12.3, suggesting that inventory levels declined at roughly the same pace as last month.
After reaching their lowest levels of the year last month, both labor-market indexes rose, but remained negative.
The employment index increased 10 points to -4.7 and the average-workweek index edged up 1 point to -10.4, indicating that employment counts and hours worked “continued to decline.”
The prices-paid index increased 6 points to 22.6, suggesting that input prices continued to rise at a moderate pace, and the prices-received index increased 3 points to 4.7, pointing to a “slight upturn” in selling prices, according to the New York Fed.
Indexes for the six-month outlook indicated that respondents were more optimistic about future conditions than in September.
The index for future business conditions increased 2 points to 36.0.
In addition, the index for future new orders rose 7 points to 39.0 and the index for future shipments jumped 15 points to 36.5, indicating that manufacturing firms anticipated a “significant increase in activity.”
In a sign that firms looked to expand employment in the months ahead, the index for future employment moved further into positive territory.
Indexes for future prices suggested that companies expected both input prices and selling prices to increase over the next six months.
The capital-expenditures index rose modestly to 13.2, while the technology-spending index edged back to 8.5.
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 state. On average, about 100 executives return responses.
Contact Reinhardt at ereinhardt@cnybj.com