N.Y. manufacturing index falls in January to lowest level since mid-2017

The Empire State Manufacturing Survey general business-conditions index fell 8 points in January to 3.9, its lowest level since mid-2017.

The headline index has fallen a cumulative 18 points since November, the Federal Reserve Bank of New York reported Jan. 15.

The January reading, based on firms responding to the survey, still indicates that “business activity grew slightly in New York,” the New York Fed said.

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

The survey found 23 percent of respondents reported that conditions had improved over the month, while 20 percent said that conditions had worsened, the New York Fed said.

“Overall, the message is that manufacturing activity is still rising, but only just, and we expect a substantial further weakening over the next few months,” Ian Shepherdson, chief economist at United Kingdom–based Pantheon Macroeconomics, said in a marketwatch.com article.

Shepherdson also projected the Empire State general business-conditions index would drop to about negative 10 over the next couple of months, which would be the lowest point since early 2016.

Survey details

The new-orders index fell 10 points to 3.5, indicating that growth in orders “slowed significantly,” while the shipments index fell more than 2 points to 17.9. 

Unfilled orders were somewhat lower, inventories declined, and delivery times were slightly shorter.

The index for number of employees fell 10 points but remained positive at 7.4, indicating a “modest increase” in employment levels, while the average-workweek index held steady at 6.8. 

The prices-paid index moved lower for a second consecutive month, its four-point decline to 35.9 “pointing to a slight deceleration” in input price increases. The prices-received index was little changed at 13.1.

Firms were “less optimistic” about the six-month outlook than in recent months. 

The index for future business conditions fell 13 points to 17.8, and the indexes for future new orders and shipments also declined. 

Firms expected employment to increase modestly. The capital-expenditures index fell 13 points to 17.9, and the technology-spending index moved down 6 points to 20.0.

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.