Economy

Empire State Manufacturing Plummets in April to Record Low

April 16, 2020

The Empire State Manufacturing Survey plunged to its lowest level ever, falling 57 points to a reading of -78.2, in April. “By way of comparison, the lowest level this indicator had reached prior to April was -34.3 during the Great Recession,” said the New York Federal Reserve.

New York City has been the epicenter for the U.S. COVID-19 outbreak, impacting manufacturing across the state as shelter-in-place edicts were imposed. New orders, shipments and employment levels declined at record rates. Inventories fell and delivery times lengthened.

Selling prices declined for the first time since 2016, tumbling to an index reading of -8.4. The prices paid index dropped 19 points to 5.8, indicating that price growth of raw materials slowed during April.

The six-month outlook showed that firms are expecting only a slight improvement in business conditions, including moderate increases in new orders and shipments. New investments are on the back burner as spending indexes for capital expenditures and new technology both tumbled to -11.0.

The New York report followed a government report that showed retail sales fell 8.7 percent in March, the biggest decline in the survey’s history.

“Manufacturing has never been in worse shape. Severely depressed demand, supply disruptions, and extremely high uncertainty will keep manufacturing on an extremely weak trajectory in the near term,” said Oren Klachkin, economist at Oxford Economics, as quoted by MarketWatch.

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