Manufacturing activity contracted for a fourth consecutive month in New York State, according to the Empire State Manufacturing June survey. The diffusion index for General Business Conditions fell 6.8 points to -16.0. The latest reading was worse than the forecast of -5.9.
Here are details from the report.
BUSINESS CONDITIONS CONTINUE TO WORSEN
Manufacturing activity fell for a fourth consecutive month in New York State, according to the June survey. The general business conditions index fell seven points to -16.0. After rising above zero last month, the new orders index fell to -14.2, and the shipments index moved down to around zero, pointing to a decline in both orders and shipments. Unfilled orders declined. The inventories index came in at around zero, signaling that business inventories held steady. Delivery times were little changed, while the supply availability index remained below zero at -8.3, suggesting that supply availability continued to worsen.
EMPLOYMENT EDGES HIGHER
The index for number of employees rose ten points to 4.7, its first positive reading since January and a sign that employment increased slightly. The average workweek index came in at -1.5, suggesting little change in hours worked. After reaching its highest level in more than two years in May, the prices paid index fell twelve points to 46.8, suggesting that the pace of price increases slowed but remained significant. The prices received index edged up four points to 26.6, suggesting that selling price increases accelerated somewhat.
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 -11.1.
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.
