Manufacturing activity in New York state still down

Last year, the index peaked at 10.8 in June and has only indicated improving business conditions in nine of the last 32 months.

Manufacturing activity slipped in August, driven by modest declines in new orders and weak labor conditions due to “a small decline in employment and a sharp drop in hours worked,” commented New York Fed economic research advisor Richard Deitz. “Firms continued to be somewhat optimistic that conditions would improve in the months ahead.”

The new orders index fell 7.3 points this month after staying flat for the previous two months, while the inventories index indicated lower stocks for a second straight month. Firms remain “fairly” optimistic about future business conditions, as 45% of respondents expect improvement over the next six months. The full release is available here.

On a three-month moving average basis (3MMA), the index rose in August to its highest reading of the year, -5.77 (see Figure 1). Recall that in March, the Index reached -22.33, the fourth-lowest 3MMA figure within our 15-year data history, which was only higher than the months of April, May, and June 2020.

An interactive history of the Empire State Manufacturing Index is available here on our website.