A leveling off of shipments and future pessimism are among the factors contributing to an 8-point drop in the general business-conditions index of the October Empire State Manufacturing Survey. 

This came after the index had climbed 30 points to -1.5 in September. The general business-conditions index is the monthly gauge of New York’s manufacturing sector. 

The October reading of -9.1 — based on firms responding to the survey — indicates that business activity “declined modestly” in New York, the Federal Reserve Bank of New York said in its Oct. 17 report. 

A negative index number indicates a decline in the sector, while a positive reading points to expansion or growth in manufacturing activity. 

The survey found 23 percent of respondents reported that conditions had improved over the month, while 32 percent indicated that conditions had worsened, the New York Fed said.

October’s results were worse than expected as economists had forecast a reading of -5, according to The Wall Street Journal.

Additional survey details

The new-orders index was unchanged at 3.7, indicating a slight increase in orders, while the shipments index plunged 20 points to -0.3, pointing to a leveling off of shipments after they increased significantly the prior month, the New York Fed said. 

The unfilled-orders index came in at -3.7, indicating that unfilled orders were slightly lower. The delivery-times index held near zero for a third straight month, showing that delivery times “held steady.” 

The inventories index edged down to 4.6, a sign that inventories increased just slightly.

The index for number of employees was little changed at 7.7, pointing to a “modest increase” in employment levels, and the average-workweek index climbed to 3.3, signaling a slight increase in hours worked. 

After falling significantly over the prior three months, the prices-paid index rose 9 points to 48.6. The prices-received index held steady at 22.9.

The index for future business conditions fell 10 points to -1.8, indicating that firms do not expect conditions to improve over the next six months. 

The indexes for future new orders and shipments “remained depressed,” though employment is expected to continue to increase, the New York Fed said. 

Delivery times are expected to shorten and increases in capital spending are planned for the months ahead.

The Federal Reserve Bank of New York 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.