Economy

Empire State Manufacturing Index: Rebound or Outlier?

May 16, 2019

Business activity in New York State rose sharply in May, according to the latest Empire State Manufacturing Survey. The general business conditions index gained eight points for a reading of 17.8, its highest level in six months.

Manufacturers reported a jump in new orders and shipments and an increase in backlogs. Inventories were slightly below April levels. Delivery times were consistent with the previous month.

The employment index dropped seven points to 4.7 indicating only a small increase in employment. Average workweek hours were steady at an index reading of 4.4.

Prices declined slightly from April with the prices paid index at 26.2 and the prices received index at 12.4.

Firms were more optimistic about business conditions for the next six months. The future business index soared 18 points to register 30.6.

The May survey was conducted before the latest escalation of the U.S./China trade war. At the time, a trade agreement with China looked promising, but now with the administration’s tariff expansion and China’s retaliation the June index may show a different outlook.

Commented MarketWatch, “Manufacturing has been one of the weak points of the economy this year, so this report stands out as a possible sign of better things to come—or, perhaps, an outlier.”