By Hank Russell
A recent survey of manufacturers in New York State recently saw positive business conditions, but added these conditions will not be as favorable in the coming months.
The Empire State Manufacturing Survey, which is put out by the Federal Reserve Bank of New York, showed that 38.7% of these companies saw an improvement in general business conditions this month. That is higher than last month, when 36.6% felt the same way. Twenty percent saw a decrease, compared to 26% in October.
Thirty-eight percent of manufacturers said they have gotten more new orders, while 22.1% said they have received fewer new orders, according to the survey. In October, 36.4% reported more new orders, but 32.7% said they saw a decline. However, the percentage of manufacturing firms with more unfilled orders increased from 15.5% to 16.3% and those with fewer unfilled orders also went up from 19.4% last month to 22.1% this month.
In October, more manufacturers saw lower than higher inventories, 21.4%-20.4%, according to the New York Fed. However, in November, 23.1% of companies had higher inventories, while 16.3% had lower inventories.
But the survey’s forward-looking indicators paint a bleaker picture for the next six months. The percentage of those who foresee better business conditions fell from 47.2% in October to 39.7% this month, while those seeing less favorable conditions were up from 16.8% to 20.6%.
On new orders, 48.4% saw new orders in the next six months this month, down from 50.1% the previous month. More manufacturers said they will see a drop in new orders, from 15.1% to 25.1%. Additionally, 17.3% saw more unfilled orders — down slightly from 17.5% in October — while 16.3% predict there will be fewer unfilled orders, up from 11.7% last month.
Although more manufacturers saw an increase in inventories in the future, from 23.3% in October to 26.0% in November, more businesses said there will be lower inventories, from 15.5% last month to 17.3% this month.
When it comes to shipments, 38.0% of manufacturers said they saw an increase, down from 41.8% the previous month. Forty-five percent foresee more shipments in the next six months, down from 46.6% last month, while more manufacturers predict there will be fewer shipments, from 15.1% in October to 21.6% this month.
“Manufacturing activity grew at a solid pace in New York State, with the survey’s headline index reaching its highest level since last November,” said New York Fed economic research advisor Richard Dietz. “While firms expect conditions to improve, optimism for the future dipped.”