Survey: N.Y. manufacturing activity fell substantially in August

However, indicators of future conditions improved       

The general business-conditions index of the Empire State Manufacturing Survey plunged 20 points to -19, pointing to a significant deterioration of economic conditions for the state’s factories.

The index had dropped 6 points in July to 1.1 after climbing 38 points in June. The general business-conditions index is the monthly gauge on New York’s manufacturing sector. 

The August reading — based on firms responding to the survey — indicates business activity “declined” in New York State, the Federal Reserve Bank of New York said in its Aug. 15 report.

A negative reading on the index indicates a contraction in manufacturing activity in the state, while a positive number shows manufacturing expansion.

The survey found 16 percent of respondents reported that conditions had improved over the month, while 35 percent said conditions had worsened, the New York Fed said.

It also found that new orders and shipments “fell significantly” at New York manufacturers.

Survey details

The new-orders index fell 23 points to -19.9, and the shipments index dropped 26 points to -12.3, pointing to a “moderate decline” in orders and shipments, the New York Fed said. 

The unfilled-orders index remained negative at -6.8, a sign that unfilled orders continued to decline. The inventories index also remained negative at -9.7, indicating that inventories moved lower. The delivery-times index came in at 1.9, suggesting delivery times were steady.

The index for number of employees came in at -1.4, showing little change in employment levels. The average-workweek index fell to -10.7, indicating a decline in hours worked. 

Both the input and selling price indexes moved up several points, but from relatively low levels, pointing to a “modest pickup” in the pace of price increases, the New York Fed said.

The index for future business conditions rose 6 points to 19.9, its highest level in more than a year, suggesting firms have become more optimistic about future conditions. 

New orders and shipments are expected to increase “significantly,” and employment is expected to “grow considerably.” Input-price increases are expected to pick up. 

The capital-spending index climbed 11 points to 13.6, suggesting that capital spending plans “firmed somewhat.”

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.