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New York Manufacturing Activity Eases in June — NY Fed

By Xavier Fontdegloria

 

Manufacturing activity in New York state continued to grow in June, albeit at a slower pace than in the previous month amid easing demand and extensive supply shortages that constrain output growth.

The Empire State Manufacturing Survey's general business conditions index fell to 17.4 in June from 24.3 in May, the Federal Reserve Bank of New York said Tuesday. The indicator came in below the consensus forecast from economists polled by The Wall Street Journal for 22.9.

Manufacturing activity in the state has grown uninterruptedly for one year, the survey signals, as the headline index has remained within expansion territory since July 2020.

"Manufacturing activity grew solidly in New York State, according to the June survey, though at a slower pace than seen in the past few months," the New York Fed said.

In June, 39% of respondents said conditions had improved in the month, while 21% reported that conditions had worsened.

Demand for goods continued to expand, but eased significantly from prior months' high readings. The new orders index fell about 13 points to 16.3, and the shipments index fell almost 16 points to 14.2, still signaling expansion but at a milder pace than in April. Unfilled orders were slightly higher, but also softened significantly compared with the prior month.

Supply strains continued to hinder the industrial sector's growth capabilities, the data showed, with signs that firms can't keep up with strong demand.

The delivery times index rose about 6 points to 29.8, hitting another record high, while the inventories index swung to contraction, the NY Fed said.

Firms in the state continued to create employment, with the index for number of employees held broadly steady at 12.3. However, the average workweek index fell about 4 points to 15.1, indicating modest gains.

Prices paid and prices received retreated only slightly from April's record highs. The prices paid index fell about 4 points to 79.8, and the prices received index decreased about 4 points to 33.3. Both indicators suggest significant price increases.

Firms in the area remained optimistic that conditions would improve over the next six months, the NY Fed said.

The index for future business conditions rose 11 points to 47.7, indicating increasing optimism. The indexes for future new orders and shipments rose to similar levels, and the future employment index rose to a record-high 41.7.

 

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

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(END) Dow Jones Newswires

June 15, 2021 08:44 ET (12:44 GMT)

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