Empire State Shock: New York Factory Activity Contracts Again in June

Street in Dumbo Brooklyn with Manhattan Bridge between buildings, New York, USA - stock photo
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Manufacturing activity in New York state did not recover in June after contracting a month earlier, a survey from the Federal Reserve Bank of New York indicated Wednesday.

The New York Fed’s “Empire State” survey of manufacturers produced a reading of negative 1.2 in June, falling short of forecasts that it would climb to a positive reading of five. Last month, the index crashed to a negative 11.6, indicating a sudden turn to contraction in New York’s manufacturing sector.

Any reading above zero indicates improving conditions. Readings below zero indicate deterioration.

The New York Fed described the state of optimism for the future as subdued for the third consecutive month. The index for future business conditions fell four points to 14.0. Delivery times, which increased in June but at a slower pace than earlier this year, are expected to decline over the next six months, as are unfilled orders.

Prices are expected to continue to increase. In the current month, the index for prices paid increased and the index for prices received dipped. Both remain at extremely elevated levels.

There were some positive indications. The new orders index returned to positive territory, rising 14.1 points to 5.3. The shipments index also moved back into positive territory, jumping 19.4 points to four. Inventories climbed 9.2 points to 17.1 in June.

Labor market indicators were mixed. Employment rose but the average work week fell.

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