By Xavier Fontdegloria
Manufacturing activity in New York state expanded in February at a quicker pace than that of January, breaking a streak of four months softening, data from the Federal Reserve Bank of New York showed Tuesday.
The Empire State Manufacturing Survey's general business conditions index increased to 12.1 in February from 3.5 in January, the highest level since September.
The reading beats expectations from economists polled by The Wall Street Journal, who had expected the indicator to increase to 5.9.
February's reading shows that economic activity in the state's manufacturing sector grew for the eighth consecutive month and gained momentum for the first time since September, when it started a downward trend.
The survey is sent to the same pool of about 200 manufacturing executives in New York state. Participants from across the state in a variety of industries respond to a questionnaire and report the change in several indicators from the previous month. A positive index reading means activity is expanding, while a negative reading indicates contraction. The indicator has remained within expansion territory since July.
In February, 32% of respondents said conditions had improved in the month, while 20% reported that conditions had worsened compared with January.
The new orders index rose four points to 10.8, indicating that orders increased, while the shipments index fell to 4.0, pointing to just a small increase in shipments.
Delivery times rose at the fastest pace in a year, and inventories were higher, the NY Fed said.
The index for number of employees was little changed at 12.1, indicating just modest gains in employment with about 20% of firms saying that employment levels increased in February while 8% reported a decrease. The average workweek index edged up to 9.0.
The prices paid index rose 12 points to 57.8, a level last reached in 2011, and the prices received index climbed eight points to 23.4, its highest level in two years. These readings points to a sharp input price increase and a pickup in selling prices, respectively.
Optimism among manufacturing firms in New York increased, with the index for business conditions rising to 34.9 from 31.9 in January.
The indexes for future new orders and shipments rose to similar levels, the N.Y. Fed said, while the index for future employment decreased.
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(END) Dow Jones Newswires
February 16, 2021 08:44 ET (13:44 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.