Manufacturing in New York state contracts again

“Business activity continued to contract in New York state in June. However, employment grew slightly for the first time in several months,” said Richard Deitz, economic research adviser at the New York Fed. “Firms also turned positive about the outlook for future business conditions, expecting activity to increase in the months ahead.”

Manufacturing activity fell for a fourth month in a row, the survey found.

The General Business Conditions Index fell seven points to -16.0. This is a diffusion index, where a positive reading signifies expansion from the prior month, zero indicates no change, and a negative reading signifies contraction. The Index stood at -6.0 the same month last year.

Still, after a dimmer outlook in April and May, firms turned positive in June, expecting conditions to improve over the next six months. The index for future General Business Conditions climbed 23 points to 21.2. New orders and shipments are expected to increase, and firms expect supply availability to be only slightly worse in the months ahead, the survey found.

Trends

To smooth monthly fluctuations and better highlight trends, the Index can be calculated on a three-month moving average (3MMA). On this basis, the Index declined about one point to -11.1 (Figure 1).

Recall that in 2024 we saw dramatic movements in the 3MMA. It touched a near four-year low of -22.3 in March 2024, then rebounded by November to reach a near three-year high of 10.3.

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