Business activity declined in New York State for the first time since early in the pandemic, according to firms responding to the March 2022 Empire State Manufacturing Survey. The headline general business conditions index fell fifteen points to -11.8, its lowest level since May 2020. New orders and shipments declined modestly, while unfilled orders increased. Delivery times continued to lengthen substantially, and inventories expanded. Labor market indicators pointed to a modest increase in employment and a slightly longer average workweek. The prices paid index remained very elevated, and the prices received index reached yet another record high. Plans for capital and technology spending remained solid. Looking ahead, firms were slightly more optimistic than last month that conditions would improve over the next six months.

Activity Declines
Manufacturing activity declined in New York State for the first time since mid-2020, according to the March survey. The general business conditions index dropped fifteen points to -11.8. Twenty-four percent of respondents reported that conditions had improved over the month, while 35 percent reported that conditions had worsened. The new orders index fell to -11.2, and the shipments index moved down to -7.4, pointing to declines in orders and shipments. The unfilled orders index came in at 13.1. The delivery times index climbed eleven points to 32.7, pointing to a substantial increase in delivery times, and inventories rose at the fastest pace in years.

Selling Price Increases Hit Fresh Record
The index for number of employees dropped nine points to 14.5, pointing to a modest increase in employment levels, and the average workweek index moved down to 3.5, indicating a slightly longer workweek. The prices paid index edged down three points to 73.8, while the prices received index rose two points to a record high of 56.1, signaling ongoing substantial increases in both input prices and selling prices.

Outlook Improves
Firms were generally optimistic about the six-month outlook. The index for future business conditions climbed eight points to 36.6. Longer delivery times, higher prices, and increases in employment are all expected in the months ahead, and capital spending plans remained firm.