The Federal Reserve Bank of New York reported that overall business conditions in its District remain weak, despite a slight gain this month. The index of general business conditions rose from -10.4 in September to -6.2 in October, with negative values indicating contracting activity.
While nearly one-quarter of respondents said that conditions were improving, almost 31 percent of them said the opposite. This was the third consecutive month that this index has declined.
Slowing new orders helped to slow overall activity, with sales in negative territory for four straight months. The new orders index went from -14.0 to -9.0 for the month. Other contracting measures included shipments, inventories, and employment.
The forward-looking measures suggest that manufacturers in New York expect positive growth in sales, shipments, and capital spending over the next six months. With that said, each of these indicators has pulled back a little in October, reflecting some diminished optimism. Employment is now not expected to grow in the months ahead, with the index for number of workers down from 8.5 to 0.
Overall, this is one more sign that that manufacturing economy remains soft at best. The Empire State Manufacturing Survey’s findings are consistent with other indicators, with weaker sales and economic uncertainties hampering growth.
Chad Moutray is chief economist, National Association of Manufacturers.