New York manufacturers are feeling the impact of the global COVID-19 pandemic with a “sharp decline” in both orders and shipments. That’s according to the April Empire State Manufacturing Survey released April 15. The general business-conditions index “plunged” 57 points to -78.2, “its lowest level in the history of the survey.” The index fell 34 […]
New York manufacturers are feeling the impact of the global COVID-19 pandemic with a “sharp decline” in both orders and shipments.
That’s according to the April Empire State Manufacturing Survey released April 15. The general business-conditions index “plunged” 57 points to -78.2, “its lowest level in the history of the survey.”
The index fell 34 points to -21.5 in March, which, at the time, was “its largest point drop on record” and “its lowest level since 2009.” The index had climbed 8 points to 12.9 in February and after edging up to 4.8 in January.
The April reading, based on firms responding to the survey, indicates “business activity declined dramatically in early April,” the Federal Reserve Bank of New York said in its April 15 report.
By way of comparison, the lowest level this indicator had reached prior to this month was -34.3 during the Great Recession, the New York Fed said.
A negative reading on the index indicates a decline in the sector, while a positive number points to expansion or growth in manufacturing activity.
The survey found 7 percent of respondents reported that conditions had improved over the month, while 85 percent indicated that conditions had worsened, the New York Fed said.
Though current conditions were “extremely weak,” firms expected conditions to be “slightly better” six months from now, according to the New York Fed.
Survey details
The new-orders index fell 57 points to -66.3, and the shipments index dropped 66 points to -68.1, indicating a “sharp decline” in both orders and shipments. Delivery times were longer and inventories were “modestly lower.”
Labor-market indicators were “extremely weak.”
The index for number of employees fell 54 points to -55.3, with nearly 60 percent of respondents indicating lower employment levels. The average workweek index fell to -61.6, with 65 percent reporting shorter workweeks.
The prices-paid index fell 19 points to 5.8, indicating a “slowing” in input-price increases, while the prices-received index fell to -8.4, pointing to a decline in selling prices for the first time since 2016.
Firms anticipate only a small improvement in business conditions over the next six months.
The index for future business conditions edged up 6 points to 7.0. The indexes for future new orders and future shipments declined, but remained positive, suggesting that firms expect orders and shipments to be “modestly higher” in six months compared with this month’s levels.
The capital-expenditures and technology-spending indexes both fell to -11.0, a sign that firms “planned to reduce both kinds of spending.”
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.