The Empire State Manufacturing Survey general business-conditions index fell 8 points to 3.9, “its lowest level in well over a year.”
The headline index has declined a cumulative 18 points since November, the Federal Reserve Bank of New York said in a news release issued Tuesday.
The January reading, based on firms responding to the survey, still indicates that “business activity grew slightly in New York,” the New York Fed said.
A positive index number indicates expansion or growth in manufacturing activity, while a negative reading shows a decline in the sector.
The survey found 23 percent of respondents reported that conditions had improved over the month, while 20 percent said that conditions had worsened, the New York Fed said.
“Overall, the message is that manufacturing activity is still rising, but only just, and we expect a substantial further weakening over the next few months,” Ian Shepherdson, chief economist at United Kingdom–based Pantheon Macroeconomics, said in a marketwatch.com article.
Shepherdson also projected the Empire State general business-conditions index would drop to about negative 10 over the next couple of months, which would be the lowest point since early 2016.
Survey details
New orders increased at a “slower pace” than in recent months, while shipments “continued to climb significantly,” the New York Fed said.
Delivery times were slightly shorter, and inventories declined, the survey found.
Labor-market indicators pointed to a modest increase in employment and hours worked. The prices-paid index moved lower for a second consecutive month, indicating some slowing in input price increases, and the prices-received index held steady.
Looking ahead, firms were “less optimistic” about the six-month outlook than they were last month.
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
Visual credit: Federal Reserve Bank of New York website