NY Manufacturing Declines, Employment Drops, Firms Remain Optimistic

Business Activity Declines in New York State

Business activity in New York State continued to decline modestly in July 2024, according to the latest Empire State Manufacturing Survey. The general business conditions index remained nearly unchanged at -6.6, indicating a steady but modest decline in manufacturing activity.

Activity Continues to Contract

The survey results showed that new orders remained flat, with the new orders index barely changing at -0.6. Shipments saw a slight uptick, with the shipments index rising to 3.9. Unfilled orders decreased, and inventories dropped further, as indicated by the inventories index falling to -6.1. Delivery times improved, with the delivery times index at -9.2, suggesting faster deliveries. Supply availability was stable, reflected by a supply availability index of zero.

Employment Continues to Decline

The employment situation worsened, with the number of employees index at -7.9, marking another month of job contraction in the sector. The average workweek index hovered around zero, indicating steady work hours. Input prices increased modestly, as the prices paid index rose slightly to 26.5, while selling prices saw minimal increases, with the prices received index at 6.1.

Firms Relatively Optimistic About Future Conditions

Despite current challenges, firms were relatively optimistic about the future. The future business conditions index stood at 25.8, slightly down from the previous month but still reflecting optimism, with 41% of respondents expecting improved conditions in the next six months. However, expectations for employment growth remained low, and capital spending plans were sluggish.

Market Forecast

Given the current data, the outlook for the New York State manufacturing sector remains cautious. The steady decline in business activity, coupled with continued employment contraction and modest price increases, suggests a bearish short-term forecast. While there is some optimism about future conditions, the immediate challenges are likely to weigh on market sentiment.