Business activity in New York state declined sharply and unexpectedly in May, a report from the Federal Reserve Bank of New York showed Monday.
The New York Fed’s Empire State survey of manufacturing showed business activity plunged. The index of general business conditions fell 36.2 points to a negative reading of 11.6 in May.
Economists had expected the index to slip to 16.5 after a better than expected 24.6 in April. Negative readings indicate declining business activity.
New orders declined and fell into negative territory. Shipments fell at the fastest pace since early in the pandemic and also turned negative. Delivery times continued to lengthen, and inventories expanded.
Labor market indicators pointed to a modest increase in employment and the average workweek.
Both the prices paid and prices received indexes moved lower but were still elevated, indicating strong inflationary pressures remain despite the slowdown in orders.
The outlook part of the survey, which asks business executives about expectations for conditions six months from now, were “subdued,” the New York Fed said. Measures for expected inventories, technology spending, and employment all turned negative.