New York manufacturing index turns negative again in December

The Empire State Manufacturing Survey general business-conditions index fell 16 points to -11.2 in December, pointing to a slowdown in manufacturing activity in the state.

The general business-conditions index is the monthly gauge of New York’s manufacturing sector. The index had climbed 14 points to 4.5 in November after declining 8 points to -9.1 in October. 

The December reading of -11.2 indicates business activity “declined” in the Empire State, the Federal Reserve Bank of New York said in its Dec. 15 survey report. That was worse than the consensus economists’ estimate of -0.5, according to CNBC.

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

The survey found 23 percent of respondents reported that conditions had improved over the month, while 34 percent indicated that conditions had worsened, the New York Fed said.

Survey details

The new-orders index held steady at -3.6, pointing to another small decline in orders, while the shipments index slipped 3 points to 5.3, but still indicating a small increase in shipments, the New York Fed said. 

The unfilled-orders index moved down to -11.2, a sign that unfilled orders were lower. The delivery-times index came in at 1.9, indicating that delivery times were little changed. 

After rising sharply the prior month, the inventories index retreated to 3.7, still pointing to a “small increase” in inventories.

Despite the overall decline in activity, the index for number of employees edged up to 14.0, marking another month of employment gains. The average-workweek index, however, fell to -4.5, signaling a small decline in hours worked. 

The pace of price increases was little changed, with the prices-paid index holding steady at 50.5 and the prices-received index remaining similar to the previous month’s level at 25.2.

The index for future business conditions climbed 12 points, but “remained subdued” at 6.3, suggesting that firms expect little improvement over the next six months, the New York Fed said. 

The indexes for future new orders and shipments climbed above zero, indicating that small increases are anticipated, and employment is expected to continue to increase. The capital-spending index rose 9 points to 23.4.

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.