Market Insights - October 19, 2022

Manufacturing Activity Declines Slightly in New York State Area

Market Insights

The Federal Reserve Bank of New York surveys manufacturers and businesses from across the state in a variety of industries and reports the change in a variety of indicators from the previous month. Respondents also state the likely direction of these same indicators six months ahead.

The survey is sent on the first day of each month to the same pool of about 200 manufacturing executives in New York State, typically the president or CEO. About 100 responses are received. Most are completed by the tenth, although surveys are accepted until the fifteenth.

Modest Business Activity Declines in NY State

On October 17th, it was reported that business activity declined modestly in New York State, according to the October 2022 Empire State Manufacturing Survey.

  • The headline general business conditions index fell eight points to -9.1.
  • New orders, unfilled orders, and shipments were all little changed from last month.
  • Delivery times held steady, and inventories inched higher.
  • Labor market indicators pointed to a small increase in employment and the average workweek.
  • Input price increases picked up, while the pace of selling price increases held steady.
  • Looking ahead, firms do not expect business conditions to improve over the next six months.


Conditions Weaken

Manufacturing activity declined in New York State, according to the October survey. The general business conditions index fell eight points to -9.1. Twenty-three percent of respondents reported that conditions had improved over the month, and thirty-two percent reported that conditions had worsened. The new orders index was unchanged at 3.7, indicating a slight increase in orders, while the shipments index plunged twenty points to -0.3, pointing to a leveling off of shipments after they increased significantly last month. The unfilled orders index came in at -3.7, indicating that unfilled orders were slightly lower. The delivery times index held near zero for a third consecutive month, indicating that delivery times held steady. The inventories index edged down to 4.6, a sign that inventories increased just slightly.

Input Price Increases Pick Up

The index for the number of employees was little changed at 7.7, pointing to a modest increase in employment levels, and the average workweek index climbed to 3.3, signaling a slight increase in hours worked. After falling significantly over the prior three months, the prices paid index rose nine points to 48.6. The prices received index held steady at 22.9.

Conditions Not Expected to Improve

The index for future business conditions fell ten points to -1.8, indicating that firms do not expect conditions to improve over the next six months. The indexes for future new orders and shipments remained depressed, though employment is expected to continue to increase. Delivery times are expected to shorten, and increases in capital spending are planned for the months ahead.

More Data Later This Week

More economic data will be released later this week, including the Beige Book and Housing Starts and Permits on Wednesday and Jobless Claims, Existing Home Sales, and Leading Indicators on Thursday.


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