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Empire State Manufacturing Survey Conditions decline sharply in May 2020
Business activity continued to deteriorate significantly in New York State, according to firms responding to the May 2020 Empire State Manufacturing Survey. The headline general business conditions index climbed thirty points, but remained well below zero at -48.5. New orders and shipments continued to decline sharply, though not as steeply as in April. Delivery times were slightly shorter, and inventories were slightly lower. After plunging last month, employment levels and the average workweek fell further in May. Input prices were slightly higher, and selling prices continued to decline modestly. While current conditions remained extremely weak, firms grew more optimistic that conditions would be better six months from now.
Activity Continues to Plummet
Manufacturing firms in New York State reported that business activity continued to decline sharply in May. While the general business conditions index climbed thirty points from the record low set last month, it came in at -48.5, its second worst reading in the survey’s history. Fifteen percent reported that conditions were better in May than they were in April, while 63 percent reported that conditions had worsened. The new orders and shipments indexes also increased, but remained well below zero at -42.4 and -39.0, respectively, pointing to another month of significant declines in orders and shipments. Delivery times were slightly shorter than last month, and inventories were slightly lower.
Employment Declines Moderate after Hefty April Drop
After plunging last month, the index for number of employees increased nearly 50 points to -6.1, suggesting that after declining sharply last month, employment levels fell somewhat further in May. The average workweek index also increased, but at -21.6, the index pointed to ongoing declines in hours worked. Price indexes were little changed from last month. At 4.1, the prices paid index indicated modest selling price increases, while the prices received index was -7.4, pointing to a second consecutive monthly decline in selling prices.
Conditions Expected to Improve
On the whole, firms expected business conditions to be better in six months. The index for future business conditions rose 22 points to 29.1. The indexes for future new orders and future shipments also posted significant increases. Indexes for future employment and the average workweek remained modestly positive. The capital expenditures and technology spending indexes both remained below zero, a sign that firms planned to reduce both kinds of spending.
Posted: May 15, 2020 Friday 08:30 AM