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Empire State Manufacturing Survey Conditions abruptly leveled off in January 2022
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Business activity abruptly leveled off in New York State, according to firms responding to the January 2022 Empire State Manufacturing Survey. The headline general business conditions index fell thirty-three points to -0.7. New orders declined slightly, while shipments held steady. Delivery times continued to lengthen, and unfilled orders increased. Labor market indicators pointed to a moderate increase in employment and a longer average workweek. Both price indexes moved lower, but remained elevated. Plans for capital and technology spending were strong. Looking ahead, firms remained optimistic that conditions would improve over the next six months.
A Sharp Decline in the Headline Index
Manufacturing activity was little changed in New York State according to the January survey, suggesting that growth stalled after a period of significant expansion. After eighteen months of positive readings, the general business conditions fell a steep thirty-three points to -0.7. Twenty-two percent of respondents reported that conditions had improved over the month, while 23 percent reported that conditions had worsened. The new orders index also posted a steep decline, falling thirty-two points to -5.0, pointing to a slight decline in orders. The shipments index fell to 1.0, indicating that shipments were little changed. The unfilled orders index came in at 12.1. The delivery times index held steady at 21.6, suggesting that delivery times continued to lengthen significantly, and inventories increased modestly.
Price Increases Remain Substantial
The index for number of employees fell five points to 16.1, and the average workweek index fell to 10.3, indicating that firms increased employment and hours worked. The prices paid index edged down four points to 76.7, and the prices received index fell eight points to 37.1, signaling ongoing substantial increases in both input prices and selling prices, though at a slower pace than last month.
Firms Remain Optimistic
Firms were generally optimistic about the six-month outlook. The index for future business conditions held steady at 35.1. The indexes for future prices paid and received both rose to record highs. The capital expenditures index climbed two points to 39.7, a multi-year high, and the technology spending index held steady at 31.9, suggesting that firms plan significant increases in both capital spending and technology spending in the months ahead.
Posted: January 18, 2022 Tuesday 08:30 AM