New York state manufacturing falls back into contraction

Note that the bank collected survey responses from manufacturing executives between Oct. 2 and Oct. 9.

The index’s fall back into contraction territory comes after a positive reading of 11.5 in September. Before that, the index’s last positive reading was in November 2023.

“Manufacturing activity contracted modestly in New York State in October, with firms reporting that new orders declined. Despite this contraction, employment expanded for the first time in a year, though by a small degree, and optimism about the outlook grew strongly,” commented Richard Deitz, the New York Fed’s economic research advisor.

While new manufacturing orders had improved in September for the first time in months, the new orders index fell 20 points to -10.2 in October.

The shipment index also dropped back into contraction territory, with October’s reading of -2.7, down 20 points from the month prior.

Inventories also dropped, with the index declining eight points to -7.5.

Though the survey showed a decline in business activity, the Fed reported growing optimism for the near-term outlook. The future business index rose eight points to a multi-year high of 38.7. The report said over half (55%) of respondents expect an improvement in conditions over the next six months.

On a three-month moving average basis (3MMA), the index fell back from a 10-month high of 0.1 in September to -1.7 in October.

An interactive history of the Empire State Manufacturing Index is available here on our website.