N.Y. manufacturing index rises but still shows contraction

General business-conditions index up 27 points to -5.8 in February

New orders declined modestly, and shipments held steady as the general business-conditions index of the Empire State Manufacturing Survey climbed 27 points in February to -5.8.

The index had fallen 22 points to -32.9 in January, representing its lowest level since mid-2020 and the fifth worst reading in the survey’s history. The general business-conditions index is the monthly gauge on New York’s manufacturing sector. 

Despite improving from the prior month, the February reading — based on firms responding to the survey — indicates business activity “continued to decline” in New York, the Federal Reserve Bank of New York said in its Feb. 15 report. 

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

The survey found 26 percent of respondents reported that conditions had improved over the month, while 32 percent said that conditions had worsened, the New York Fed said.

Survey findings

The New York new-orders index rose 23 points to -7.8, pointing to a small decline in orders, and the shipments index rose to 0.1, indicating that shipments held steady. 

The unfilled-orders index came in at -9.2, a sign that unfilled orders “continued to decline,” the New York Fed said. The delivery-times index fell 10 points to -9.2, its “first significant negative reading since before the pandemic,” indicating that delivery times shortened. 

The inventories index was little changed at 6.4, pointing to a small increase in inventories.

The index for number of employees fell to -6.6, its first negative reading in more than two years, indicating that employment levels declined for the first time since early in the pandemic, the New York Fed said. 

The average-workweek index remained negative at -12.1, indicating that hours worked “shrank for a third consecutive month.” 

Input prices and selling prices increased at a faster pace than last month: the prices-paid index rose 12 points to 45.0, and the prices-received index climbed 10 points to 28.4.

The index for future business conditions rose 7 points to 14.7, suggesting that firms expect “some improvement” over the next six months. New orders and shipments are expected to rise somewhat, and delivery times are expected to shorten further. 

Employment is not expected to increase in the months ahead, the New York Fed said. 

The capital-spending index edged down to 18.3, and the technology-spending index fell to 10.1.

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.