New York manufacturing index turns negative again in October

A benchmark gauge of manufacturing activity in New York state slipped into negative territory again in October, pointing to a decline in the sector.

The general business-conditions index of the October Empire State Manufacturing Survey fell 7 points to -4.6 on factors that included declines in new orders, shipments, and unfilled orders.

The index had climbed 21 points in September to 1.9 after plummeting 20 points in August. 

Based on manufacturing firms responding to the survey, the October reading indicates business activity “edged lower” in New York state, the Federal Reserve Bank of New York said in its Oct. 16 survey report. A negative index number indicates a deterioration of business activity in the sector, while a positive reading shows expansion or growth in manufacturing activity in the state. 

The survey found 24 percent of respondents reported that conditions had improved over the month, while 29 percent said that conditions had worsened, per the New York Fed.

The -4.6 reading in October was slightly better than the -6 consensus number that analysts were expecting, according to Bloomberg.

Survey details

The new-orders index dropped 9 points to -4.2, pointing to a small decline in orders, and the shipments index fell 11 points to 1.4, a sign that shipments were little changed. 

The unfilled-orders index fell to -19.1, indicating that unfilled orders fell “significantly,” the New York Fed said.

The inventories index remained below zero at -2.1, pointing to a small decline in inventories. The delivery-times index moved down to -6.4, suggesting delivery times shortened.

The index for number of employees rose 6 points to 3.1, and the average-workweek index edged up to 2.2, indicating a slight increase in employment levels and hours worked. 

The prices-paid index held steady at 25.5, reflecting little change in the pace of input-price increases, while the prices-received index fell 8 points to 11.7, signaling a “deceleration” of input-price increases.

The index for future business conditions moved down 3 points to 23.1, suggesting that firms remained “relatively optimistic” about future conditions. However, less than half of respondents expect conditions to improve over the next six months, the New York Fed noted. 

New orders and shipments are expected to increase, “though less so than last month,” and employment is expected to grow. The capital-spending index was little changed at 9.6, suggesting that capital-spending plans remained “somewhat weak.”

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.