New York manufacturing activity growth slowed in June

New orders and shipments remained positive, but the pace of growth slowed, posting their largest month-on-month (m/m) decline in six months. The new orders index fell 19.2 points to 3.5, while shipments declined 10.3 points to 8.6. Manufacturers also reported that unfilled orders continued to rise and delivery times lengthened, signaling tighter capacity and continued pressure on lead times. Inventories decreased while supply availability worsened, with the supply availability index falling 3.2 points to -13.9.

Labor indicators were mixed as firms added headcount but cut hours. The employment index rose to 1.3, and the average workweek decreased by 6.4 points to 5.1.

Input cost inflation accelerated sharply, as the prices paid index increased 14 points to 51.0 after easing in March. Selling prices, however, held steady at 21.8, suggesting margin pressure for manufacturers unable to fully pass through higher costs, according to the survey.

Forward-looking sentiment softened. While firms still expect conditions to improve over the next six months, the future business conditions index slipped 3.4 points to 30.1. Expectations for new orders, shipments, and employment remained positive, but capital spending plans weakened, with the capex index dropping to 10.9. Respondents also anticipate further deterioration in supply availability, pointing to continued procurement challenges through the summer.

The Empire State Manufacturing Index is a diffusion index. A positive reading signifies expansion from the prior month, zero indicates no change, and a negative reading signifies contraction. Responses were collected between June 2 and June 9. 

Trends

To smooth monthly fluctuations and better highlight trends, the index can be calculated as a three-month moving average (3MMA).