Manufacturing activity contracted for a second consecutive month in New York State, according to the Empire State Manufacturing April survey. The diffusion index for General Business Conditions rose 11.9 points but remained below zero at -8.1. The latest reading was better than the forecast of -12.8.
Here are details from the report.
ACTIVITY CONTINUES TO CONTRACT
Manufacturing activity fell for a second consecutive month in New York State, according to the April survey. After dropping twenty-six points last month, the general business conditions index climbed twelve points but remained below zero at -8.1. The new orders and shipments indexes also held below zero at -8.8 and -2.9, respectively, pointing to ongoing declines in both orders and shipments. Unfilled orders edged up slightly. The inventories index came in at 7.4, signaling that business inventories continued to expand. Delivery times were unchanged, while the supply availability index fell to -5.7, suggesting supply availability was somewhat lower.
PRICE INCREASES ACCELERATE
The index for number of employees came in at -2.6, while the average workweek index fell to -9.1, pointing to little change in employment levels but a decline in hours worked. Both price indexes climbed for a fourth consecutive month to their highest levels in more than two years: the prices paid index rose six points to 50.8, and the prices received index rose six points to 28.7.
Background on the Empire State Manufacturing Survey
The Empire State Manufacturing Index rates the relative level of general business conditions in New York state. A level above 0.0 indicates improving conditions, and below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state.
Below is a chart of the current conditions and its 3-month moving average, which helps clarify the trend for this extremely volatile indicator. The current 3-month moving average stands at -7.5.
Since this survey only goes back to July of 2001, we only have two complete business cycles with which to evaluate its usefulness as an indicator for the broader economy. Following the great recession, the index has slipped into contraction multiple times, as the general trend slowed. We saw a gradual decline in 2015 that rose back up in 2016, with a giant dip in 2020 due to COVID-19. The index quickly picked up again in 2021, declined for 2022, and gradually rose in 2023. The index kicked off 2024 with a sharp decline but rose during the back half of the year, reaching positive territory for the first time in over 2.5 years. However, the first few months of 2025 have pulled the index back into negative territory.
