Research >> Economics
Empire State Manufacturing Survey Conditions increased modestly in July 2022
|
Business activity increased modestly in New York State, according to firms responding to the July 2022 Empire State Manufacturing Survey. The headline general business conditions index climbed twelve points to 11.1. New orders increased marginally, and shipments expanded significantly. Unfilled orders edged lower for a second consecutive month. Delivery times lengthened at the slowest pace in months, and inventories picked up. Labor market indicators pointed to a solid increase in employment and a slightly longer average workweek. While still elevated, both the prices paid and prices received indexes moved significantly lower, pointing to a deceleration in price increases. Firms turned pessimistic about the six-month outlook, a rare occurrence in the survey’s history.
Activity Grows Modestly
Manufacturing activity expanded modestly in New York State, according to the July survey. The general business conditions index climbed twelve points to 11.1. Thirty-four percent of respondents reported that conditions had improved over the month, and twenty-three percent reported that conditions had worsened. The new orders index was little changed at 6.2, pointing to a small increase in orders, while the shipments index surged to 25.3, indicating strong growth in shipments. The unfilled orders index held steady at -5.2, indicating that unfilled orders shrank for a second consecutive month. The delivery times index fell for a third consecutive month, declining six points to 8.7, suggesting that delivery times lengthened, though at the slowest pace in over a year. The inventories index was little changed at 14.8, signaling that inventories expanded.
Employment Growth Remains Solid
The index for number of employees held steady at 18.0, pointing to a solid increase in employment, and the average workweek index came in at 4.3, indicating a slight increase in hours worked. While they remained elevated, price indexes moved notably lower, indicating a deceleration in price increases. The prices paid index fell fourteen points to 64.3, and the prices received index moved down twelve points to 31.3.
Firms Turn Pessimistic
Firms now expect activity to decline over the next six months, a sentiment only expressed three other times in the survey’s history. The index for future business conditions plunged twenty points to -6.2. Orders are not expected to increase, and shipments are expected to be only slightly higher. Delivery times and unfilled orders are expected to decline over the next six months, and expected price increases were lower than in recent months. The capital spending and technology spending indexes fell, but remained positive.
Posted: July 15, 2022 Friday 08:30 AM