By Xavier Fontdegloria
Manufacturing activity in New York state continued to expand in May but the growth pace slowed slightly compared with April amid widespread supply strains, data from the Federal Reserve Bank of New York showed Monday.
The Empire State Manufacturing Survey's general business conditions index fell to 24.3 in May from 26.3 in April. The reading is broadly in line with the consensus forecast from economists polled by The Wall Street Journal, who expected the indicator to decrease to 24.8.
Manufacturing activity in the state has grown for 11 consecutive months, the survey signals, as the headline index has remained within expansion territory since July 2020. The pace of growth has accelerated in the last few months amid strong demand for goods.
The survey is sent to the same pool of about 200 manufacturing executives in New York state, who respond to a questionnaire and report the change in several indicators from the previous month.
"Business activity continued to grow at a solid clip in New York State," the New York Fed said.
Manufacturing output is recovering across the U.S., but it is still below the pre-pandemic level. The sector continues to be constrained by supply-chain disruptions that are likely to persist in the near term, economists say.
In May, 37% of respondents said conditions had improved in the month, while 13% reported that conditions had worsened compared with April.
Demand for goods remained robust and expanded strongly. The new orders index moved up two points to 28.9, a multi-year high, and the shipments index increased five points to 29.7. Unfilled orders also rose, the NY Fed said.
Supply strains continued to constrain output growth, respondents said. The delivery times index moved down five points, but at 23.6 it held near its record high registered in April. Inventories were somewhat higher, the report said.
Firms in the state continued to add gains in employment and hours worked. The index for number of employees held broadly steady at 13.6, and the average workweek index rose six points to 18.7.
Both prices paid and prices received reached record highs. The prices paid index rose nine points to 83.5, and the prices received index climbed two points to 37.1.
Firms in the area remained optimistic that conditions would improve over the next six months, and expected significant increases in employment and prices.
The index for future business conditions eased slightly to 36.6. The indexes for future new orders and shipments also softened somewhat but remained at strong levels, while respondents expect to increase employment significantly in the months ahead as the index remained in expansion territory, the report said.
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(END) Dow Jones Newswires
May 17, 2021 08:50 ET (12:50 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.