Economy
Empire State Manufacturing Contracts Again in June
Written by David Schollaert
June 16, 2022
Business activity in the state of New York was little changed in June, following a surprising fall in May, according to the Empire State Manufacturing Survey.
The New York Fed’s Empire State headline general business conditions index – a gauge of manufacturing activity in the state – rose 10.4 points in June but remained at a -1.2 reading after falling 26 points to -11.6 the month prior.
This is just the fourth negative reading since the onset of the global pandemic more than two years ago, but the third negative reading in four months. Any reading below zero indicates deteriorating conditions.
The specifics of the report were somewhat stronger than the headline index. In June, new orders, and shipments both rebounded from share declines month-on-month (MoM). The prices-paid and prices-received indexes remained elevated. Unfilled orders fell in June, while delivery times lengthened at a slower pace. Inventories also rose.
The new orders index rose 14.1 points to a reading of 5.3 in June, and the shipments index jumped 19.4 points to 4.
Unfilled orders tumbled 6.9 points to a reading of -4.3 in June while delivery times lengthened at a slower pace, falling 5.7 points to 14.5. Inventories rose 9.2 points to 17.1 in June.
In June, the prices received index inched down 2 points to 43.6, while the prices paid index rose 4.9 points to a still-elevated 78.6.
Employee indexes diverged in June. The average workweek index was 6.4 – down 5.5 points versus April’s reading, while employment increased 5 points to a reading of 19.
Firms were slightly less optimistic about the next six months, as the view on future market conditions was subdued for a third consecutive month. The future business conditions index fell 4 points to a reading of 14, the Federal Reserve Bank of New York said.
Shorter delivery times, lower prices, and declining employment are all expected in the months ahead. Capital spending plans were little changed (+0.2 points) after falling for the first time in 2022 last month.
The indexes for future prices paid and received both diverged in June. Future prices paid rose 6 points to a reading of 69.2, while future prices received was down 2 in June to a reading of 43.6.
An interactive history of the Empire State Manufacturing Index is available on our website. If you need assistance logging into or navigating the website, please contact us at info@SteelMarketUpdate.com.
By David Schollaert, David@SteelMarketUpdate.com
David Schollaert
Read more from David SchollaertLatest in Economy
CRU: Dollar and bond yields rise, metal prices fall as Trump wins election
Donald Trump has won the US presidential election. The Republican party has re-taken control of the Senate. Votes are still being counted in many tight congressional races. But based on results so far, the Republicans seem likely to maintain control of the House of Representatives. If confirmed, this will give Trump considerable scope to pass legislation pursuing his agenda. What this means for US policy is not immediately obvious. Trump will not be inaugurated until Jan. 20. In the coming weeks and months, he will begin to assemble his cabinet, which may give a clearer signal on his policy priorities and approaches. Based on statements he made during the presidential campaign, we have set out the likely direction of his economic policy here and green policy here.
ISM: Manufacturing index fell in Oct to lowest point of ’24
Domestic manufacturing contracted for the seventh straight month in October, according to the latest report from the Institute for Supply Management (ISM). This marks the 23rd time in the last 24 months that it has been in contraction.
Chicago Business Barometer slips in October
The Chicago Business Barometer fell to a five-month low in October and continues to indicate deteriorating business conditions, according to Market News International (MNI) and the Institute for Supply Management (ISM).
Final Thoughts
We all know the American news cycle moves pretty fast. Viral today, cached tomorrow. So it is with the US presidential election on Tuesday, Nov. 5. People have election fatigue. They've moved on to other things like planning holiday parties, debating Super Bowl hopefuls, or even starting to look forward to our Tampa Steel Conference in February.
CRU: What will the US elections mean for economic policy?
In this Insight piece, CRU economists explore the possible economic effects of Trump's and Harris' agendas.