Economy

New York Manufacturing Robust in June

June 17, 2018

Manufacturing in New York State expanded in June at a faster pace than April. The Empire State Manufacturing Index jumping 4.9 points to 25.0 and its highest reading since October, said the Federal Reserve Bank of New York on Friday.

New orders and shipments made solid gains, driving increases to backlogs and delivery times. The prices paid index retreated slightly from last month’s multi-year high, but continued to indicate significant price increase, said the New York Fed. Prices received remained at elevated levels during the month.

Employment levels jumped as workweek lengthened and firms filled positions to meet production demands.

Optimism was higher for the second month in a row as indicated by an eight point climb 38.9 on the future business index.

Ian Shepherdson, chief U.S. economist at Pantheon Macroeconomics, warned that June’s index high may be short-lived.

“It dropped by 6.7 points in April after the announcement of tariffs on steel and aluminum imports, so today’s confirmation that the U.S. will impose further tariffs, on some $50 billion worth of Chinese imports, probably will push it down again in July,” said Shepherdson. “For now, everything looks strong, with robust readings for orders, shipments, and employment.”

He added, “The core message, of strong growth and increasing pressure on prices at the producer level, is consistent with official data. But the prospect of a broadening trade war with China is raising the risk that the momentum in growth won’t be sustained.”

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