NY Fed’s Empire State Manufacturing Survey Falls Deeper in Contraction for Second Month

Manufacturing in the Northeast Stuck in Deep Contraction Territory

Empire State Manufacturing Survey showed regional manufacturing activity contracted for a second straight month in September, remaining well below zero at -14.7. Steep declines were reported for both orders and shipments, with the new orders index tanking to -12.9 and the shipments index falling -8.0, respectively.

Economists polled by Reuters had forecast a reading of -0.75 this month. A reading above zero indicates expansion, or growth, while below zero indicates contraction. Employment in the sector also fell for the first time in more than two-and-a-half years (since Jan. 2013), down from 1.82 in August. Labor market indicators suggested that both employment levels and hours worked contracted, and the six-month outlook declined to 23.21 from 33.64 in August, suggesting that optimism about future conditions were also depressed.

The index came in at -14.92 in August, which had been its poorest reading and lowest level since April 2009. The August and September levels marked the first back-to-back contractions since a six-month run in negative territory between August 2012 and January 2013.

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions. The new orders index was in negative territory for a fourth month at -12.91 compared with -15.70 in August, while shipment activity declined for the second month in a row to -7.98 from -13.79 in August.

The prices paid index fell to 4.12 from 7.27 in August, while prices received fell to -5.15 from 0.91 the previous month.