Empire State Manufacturing Survey declines to 3.9 v 10.0 eyed, lowest level in over a year

Business activity grew slightly in New York State, according to firms responding to the January 2019 Empire State Manufacturing Survey. The headline general business conditions index fell eight points to 3.9, its lowest level in well over a year. New orders increased at a slower pace than in recent months, while shipments continued to climb significantly. Delivery times were slightly shorter, and inventories declined. Labor market indicators pointed to a modest increase in employment and hours worked. The prices paid index moved lower for a second consecutive month, indicating some slowing in input price increases, and the prices received index held steady. Looking ahead, firms were less optimistic about the six-month outlook than they were last month.

Growth Continues to Slow

Manufacturing firms in New York State reported that business activity expanded slightly. The general business conditions index fell eight points to 3.9, its lowest reading since mid-2017. The headline index has fallen a cumulative eighteen points since November. Twenty-three percent of respondents reported that conditions had improved over the month, while 20 percent reported that conditions had worsened. The new orders index fell ten points to 3.5, indicating that growth in orders slowed significantly, while the shipments index was little changed at 17.9. Unfilled orders were somewhat lower, inventories declined, and delivery times were slightly shorter.

Employment Rises Modestly

The index for number of employees fell ten 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.

Optimism Wanes

Firms were less optimistic about the six-month outlook than in recent months. The index for future business conditions fell thirteen 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 thirteen points to 17.9, and the technology spending index moved down six points to 20.0.

New York Fed Release

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Ed Moya

Ed Moya

Senior Market Analyst at OANDA
With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏
Ed Moya