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Empire State Manufacturing Survey Conditions contracted sharply in January 2023
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Business activity contracted sharply in New York State, according to firms responding to the January 2023 Empire State Manufacturing Survey. The headline general business conditions index fell twenty-two points to -32.9. New orders and shipments declined substantially. Delivery times held steady, and inventories edged higher. Employment growth stalled, and the average workweek shortened. Input price increases slowed considerably, and selling price increases also moderated. Looking ahead, firms expect little improvement in business conditions over the next six months.
Activity Tumbles
Manufacturing activity fell steeply in New York State, according to the January survey. The general business conditions index fell twenty-two points to -32.9, its lowest level since mid-2020 and the fifth worst reading in the survey’s history. Eleven percent of respondents reported that conditions had improved over the month, and forty-four percent reported that conditions had worsened. The new orders index dropped twenty-eight points to -31.1, and the shipments index also declined twenty-eight points to -22.4, pointing to a steep decline in both orders and shipments. The unfilled orders index edged down to -14.3, a sign that unfilled orders were lower. The delivery times index came in at 0.0, indicating that delivery times were unchanged. The inventories index held steady at 4.5, pointing to a small increase in inventories.
Employment Growth Stalls
The index for number of employees fell eleven points to 2.8, its lowest level in more than two years, signaling that employment growth stalled. The average workweek index remained negative at -10.4, indicating a decline in hours worked. Input price increases slowed considerably, with the prices paid index dropping eighteen points to 33.0. Selling price increases also moderated, with the prices received index falling six points to 18.8.
Firms Expect Conditions to Remain Weak
The index for future business conditions held steady at 8.0, suggesting that firms expect little improvement over the next six months. New orders and shipments are expected to rise somewhat, while employment is expected to increase only modestly. The capital spending index held steady at 22.3, and the technology spending index rose to 17.0.
Posted: January 17, 2023 Tuesday 08:30 AM