N.Y. manufacturing index slides into negative territory in December

The Empire State Manufacturing Survey general business-conditions index fell 24 points to -14.5 in December, pointing to a decline in the sector, according to the latest monthly report from the Federal Reserve Bank of New York.

The index had gained 14 points to 9.1 in November, its highest reading since April, after declining 7 points to -4.6 in October. 

The general business-conditions index is the monthly gauge on New York’s manufacturing sector and is based on firms responding to the survey.

A negative index number shows a deterioration in manufacturing conditions in the state, while a positive reading indicates expansion or growth in manufacturing activity. 

The December survey found 18 percent of respondents reported that conditions had improved over the latest month, while 32 percent said that conditions had worsened, the New York Fed said.

Survey details

The Empire State Survey found that new orders fell 6 points to -11.3, pointing to a decline in orders for a third straight month, and the shipments index dropped 16 points to -6.4, indicating a slowdown in shipments activity, the New York Fed said. 

The unfilled-orders index held steady at -24.0, a sign that unfilled orders continued to fall “significantly.” After rising into positive territory in November, the inventories index retreated 14 points to -5.2 in December, suggesting that inventories moved lower. 

The delivery times index dropped 10 points to -15.6, its “lowest reading in several years, a sign that delivery times shortened.”

The index for number of employees fell 4 points to -8.4 in December, its lowest level “in several months,” pointing to a modest decline in employment levels, the New York Fed said. The average-workweek index was little changed at -2.4, indicating a slight dip in hours worked. 

The prices-paid index moved down 6 points to 16.7 in December, suggesting an ongoing moderation in input price increases, while the prices-received index held steady at 11.5, a sign that selling-price increases remained modest.

After plunging in November, the index for future business conditions climbed 13 points to 12.1 the next month, a reading that suggests firms were “still not very optimistic” that conditions would improve in the months ahead.

New orders and shipments, as well as employment, are expected to increase only modestly over the next six months, according to the survey’s gauge of future conditions. The capital-spending index “remained depressed” at 4.2 in December, and the technology-spending index came in at 8.3, suggesting that firms’ investment plans “remained 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.