Rise in orders, shipments sends N.Y. manufacturing index higher

An increase in New York manufacturing activity in the last few weeks has a monthly index at its highest level since November 2024. The general business conditions index of the Empire State Manufacturing Survey rose 6 points to 11.9 in August. That followed up a 22-point jump in the index in July to bounce back into positive territory. The general business conditions index is the monthly gauge of New York’s manufacturing sector. Based on firms responding to the Empire State Survey, the August reading indicates business activity “grew modestly” in New York state, the Federal Reserve Bank of New York said in its Aug. 15 report. A positive index reading indicates expansion or growth in manufacturing activity, while a negative index number points to a decline in the sector. The August survey found both new orders and shipments increased. In addition, inventories declined after growing in July, and supply availability “worsened somewhat.” Capital-spending plans were “soft.” Manufacturing firms in the Empire State expect conditions to improve in the months ahead, though “optimism diminished” compared to last month, the New York Fed said. The August reading of 11.9 for the general business conditions index beat analysts’ expectations of a slightly negative index number for the month.

Survey details

The new-orders index rose 13 points to 15.4, and the shipments index held steady at 12.2, pointing to increases in both orders and shipments, the New York Fed said. Unfilled orders edged lower. After rising sharply in July, the inventories index retreated 22 points to -6.4, “indicating that business inventories shrank.” Delivery times were “significantly longer,” and supply availability was “somewhat worse.” The index for number of employees remained positive at 4.4, pointing to a slight increase in employment, and the average-workweek index came in at around zero, suggesting that hours worked held steady. The prices-paid index was little changed at 54.1, a sign that input price increases “remained steep,” while the prices-received index edged down to 22.9, suggesting that selling price increases “remained moderate,” the New York Fed said. The index for future general business conditions fell 8 points to 16.0, suggesting that businesses expect activity to increase in the months ahead, but firms were less optimistic than they were the previous month. New orders and shipments are expected to increase. Two-thirds of respondents expect input prices to pick up further over the next six months. Capital spending plans were “soft.” 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.