The Empire State Manufacturing Survey general business-conditions index jumped to 17.2 in July from -0.2 a month before, as new orders and shipments both expanded substantially.
This was the first time the Empire State index was in positive territory since February, before the coronavirus shutdowns started in March.
Economists had anticipated a July reading of 8.9, according to Marketwatch, citing a survey by Econoday.
The July index number, based on firms responding to the survey, indicates business activity “increased in New York for the first time in several months,” the Federal Reserve Bank of New York said in its July 15 report. The Empire State index staged a massive 48-point comeback in June to climb to -0.2, after “breaching” record lows in April and May. July’s jump completed the New York manufacturing industry’s round trip back to expansionary conditions.
A positive reading indicates expansion or growth in manufacturing activity, while a negative index number points to a sector decline.
The survey found 41 percent of respondents reported that conditions had improved over the month, while 24 percent reported that conditions had worsened, the New York Fed said.
The Empire State new-orders index rose 15 points to 13.9, indicating that orders increased, and the shipments index climbed 15 points to 18.5, pointing to a “solid increase” in shipments, the New York Fed said.
Unfilled orders were unchanged. Delivery times were “slightly longer,” and inventories declined.
The index for number of employees edged up to 0.4, signaling that employment levels were steady. Notably, 22 percent of firms said that employment levels increased in July, the same proportion that reported a decrease.
The average workweek index increased 9 points to -2.6, pointing to a small decline in hours worked.
The prices-paid index was little changed at 14.9, indicating that input prices increased at about the same pace as the prior month. The prices-received index moved down to -4.5, indicating that selling prices declined.
After rising sharply the previous month to a multi-year high, the index for future business conditions fell 18 points to 38.4, suggesting that firms remained optimistic about future conditions, “though less so than in June,” the New York Fed said.
The indexes for future new orders and future shipments fell “somewhat,” but remained near 40. The index for future employment rose to 21.1, suggesting manufacturers expect to increase employment in the months ahead.
The capital-expenditures index rose to 9.1, a sign that firms, on net, planned to increase capital spending.
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.