N.Y. manufacturing index bounces back after two bad months

A monthly gauge on New York manufacturing activity indicated the state’s manufacturers are more optimistic about the future than they had been during the coronavirus crisis of the past couple months.

The Empire State Manufacturing Survey general business-conditions index climbed almost back to even in June after posting record lows in the prior two months.

The benchmark index of the survey by the Federal Reserve Bank of New York jumped 48 points to -0.2. That easily beat economists’ expectations of a reading of -30, MarketWatch reported, citing a survey by Econoday.

The general business-conditions index was at -48.5 in May and -78.2 in April, the two lowest levels in the survey’s history.

The June reading, based on firms responding to the survey between June 2 and June 9, indicates business activity “steadied” in New York, the New York Fed said in its June 15 report.

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

The survey found 36 percent of respondents reported that conditions had improved over the month, while 36 percent indicated that conditions had worsened, the New York Fed said.

The survey also found that firms were “notably more optimistic” that conditions would be better in six months, with the index for future business conditions rising to its highest level in more than a decade, the New York Fed said.

Survey details

The new-orders index rose 42 points to a level of around zero, indicating that the quantity of orders was “unchanged” from last month, and the shipments index climbed 42 points to 3.3, pointing to a “slight increase” in shipments. 

Delivery times and inventories both held steady.

The index for number of employees was little changed at -3.5, pointing to a second consecutive month of slight employment declines. Notably, 18 percent of firms said that employment levels increased in June. 

The average-workweek index increased 10 points, but remained negative at -12.0, indicating an ongoing decline in hours worked, “though at a slower pace” than in recent months. 

The prices-paid index increased 13 points to 16.9, indicating that input prices increased at a faster pace than in May. The prices-received index moved up to -0.6, its near zero value indicating that selling prices “halted their recent decline and held steady this month,” the New York Fed said.

Firms were “much more optimistic” about future conditions. 

The index for future business conditions rose 27 points to 56.5, its “highest level in more than a decade.” 

The indexes for future new orders and future shipments also posted “significant” increases. 

The index for future employment rose to 19.0, its “highest level in many months,” suggesting firms expect to increase employment in the months ahead. 

The capital-expenditures index climbed slightly above zero, a sign that firms, on net, planned to increase capital 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.