But Employment, Future Outlook More Positive
By Hank Russell
A recent report from the Federal Reserve Bank of New York found that manufacturing in the Empire State has declined from last month.
According to the Empire State Manufacturing Survey. The headline general business conditions index fell seven points to -16.0. Only 16% of firms reported an increase, compared to 28.3% in May, while 32.9% saw a decline, which is less than it was last month.
When it came to new orders, shipments and unfilled orders, the indices went from positive to negative in one month. The index for new orders fell from 7.0 to -14.2. This month, 21.4% reported an increase in new orders, down from May’s 40% figure; 35.6% saw fewer new orders in June, compared to 33.1% in May.
The shipments index went from 3.5 in May to -7.2 in June. In June, 22.7% reported more shipments, while 29.9% saw fewer shipments. Last month, 34.3% of firms saw more shipments, while 30.8% saw a lesser amount.
The unfilled orders index dropped from 4.8 last month to -8.3 this month. In June, 12.8% reported having a higher number of unfilled orders, whereas 21.1% saw fewer unfilled orders. In May, 21.9% saw more unfilled orders and 17.1% saw less.
However, there were some bright spots in the report. The inventories index remained in positive territory, despite a sharp monthly decline from 4.0 to 0.9. Twenty-two percent saw more inventory in June, while 21.1 did not. May saw 22.9% of respondents with more inventory and 18.1% saw just the opposite.
The New York Fed also reported that 14.6% of companies had more employees on the payroll, compared to 13.9% in May. Only 9.9% had fewer employees, which is good news, whereas 19% had fewer employees the previous month.
Looking ahead for the next six months, 38.4% of respondents foresee more favorable business conditions this month, while 17.2% don’t hold the same opinion. Last month’s prognosis was more downbeat, with 33.1% expecting a positive outlook, but 35.1% expressing a negative outlook.
“Business activity continued to contract in New York State in June,” said Richard Deitz, an economic research advisor at the New York Fed. “However, employment grew slightly for the first time in several months. Firms also turned positive about the outlook for future business conditions, expecting activity to increase in the months ahead.”