The general business conditions index of the Empire State Manufacturing Survey fell 15 points to -12.6 in January, with indexes for new orders and shipments also declining.
It’s the second straight monthly drop after the index had plummeted 31 points to 0.2 in December — after hitting its highest reading in nearly three years in November. The general business conditions index is the monthly gauge of New York’s manufacturing sector.
Based on manufacturing firms responding to the survey, the January reading indicates business activity contracted in New York state, the Federal Reserve Bank of New York said in its survey report issued on Jan. 15. A negative index number indicates a falloff in manufacturing conditions, while a positive reading points to expansion or growth in manufacturing activity.
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The Empire State Survey found the index for new orders “fell modestly,” and the shipments index also turned negative.
At the same time, manufacturing firms grew more optimistic that conditions would improve in the months ahead, the New York Fed said.
Survey details
The new-orders index fell 13 points to -8.6, pointing to a “modest decline” in orders, and the shipments index retreated 11 points to -1.7, indicating that shipments were little changed, the New York Fed said.
Unfilled orders continued to fall. The inventories index remained positive at 5.8, a signal that inventories grew. The delivery-times index came in at 3.5, suggesting that delivery times were slightly longer, and the supply availability was zero, a sign that supply availability was unchanged.
The index for number of employees rose 8 points, but held near 0 at 1.2, suggesting that employment levels were steady. The average-workweek index remained negative at — 15.1, pointing to a “significant decline” in hours worked.
After dipping in December, price indexes climbed in January, though they remained subdued. The prices-paid index increased 8 points to 29.1, and the prices-received index rose 5 points to 9.3.
New York manufacturing firms grew more optimistic that conditions would continue to improve in the months ahead.
The index for future business activity climbed 10 points to 36.7, with 53 percent of respondents expecting conditions to improve over the next six months. Employment is expected to grow and supply availability is anticipated to be steady. Capital-spending plans remained modest, the New York Fed said.
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.
