New York Manufacturing Activity Stalled in January — NY Fed
Factory activity in the New York state leveled off in January compared with the previous month as demand for goods declined, according to data from a survey compiled by the Federal Reserve Bank of New York released Tuesday.
The Empire State Manufacturing Survey’s general business conditions index fell sharply to minus 0.7 in January from 31.9 in December, missing the 25.5 consensus estimate from economists polled by The Wall Street Journal. Any reading above zero suggests that the region’s manufacturing sector is expanding.
The slightly negative reading follows 18 consecutive months of gains and suggests that growth in regional manufacturing activity stalled after a period of significant expansion, the New York Fed said.
In January, around 22% of the firms polled said business conditions had improved over the month, while 23% reported that conditions worsened.
Demand for goods showed signs of faltering. The new orders index fell sharply to minus five from 27.1 the previous month, pointing to a slight decline in orders. The shipments index declined to one, suggesting that shipments were broadly unchanged.
Labor market indicators signal that firms continued to create jobs, but at a slower pace than in the previous month. The index for number of employees fell five points to 16.1, while the average workweek index dropped to 10.3, the report said.
The delivery times index fell slightly to 21.6, suggesting that input delivery times continued to lengthen, though by less than in December. Unfilled orders increased, though at a slower pace than the previous month, in a sign that supply-chain bottlenecks aren’t getting worse.
The price indexes moved lower, but remained elevated. The prices paid index declined to 76.7 from 80.2, and the prices received index fell to 37.1 from 44.6. Both indicators point to substantial increases in both input and selling prices, though at a slower pace than last month, the NY Fed said.
Respondents to the survey were generally optimistic that conditions would improve over the next six months, the report said. The index for future business conditions decreased slightly to 35.1 from 36.4, but remained in solid expansion territory, with firms reporting strong plans for capital and technology spending in the months ahead.
Source: Dow Jones