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The Empire State Manufacturing Survey indicates that
manufacturing activity in New York State deteriorated
slightly in May. The general business conditions index
fell below zero, to
-3.2. The new orders index remained
close to zero, and the shipments index, while positive,
declined markedly. The prices paid index exceeded its
earlier record high by a wide margin, reaching 69.6,
while the prices received index dipped several points.
Employment indexes hovered near zero. Future indexes
were generally low and down from last month's levels,
suggesting that the outlook for the next six months
remains subdued, particularly for employment.
Supplementary questions in the May survey focused on
past and expected changes in the prices that firms pay
for inputs and the prices that they charge their customers.
Respondents estimated that the prices they paid had
risen 8.7 percent, on average, over the past twelve
months, and they expected such prices to rise by an
average of 6.8 percent over the next twelve months.
In contrast, firms' selling prices were reported to
have risen by an average of just 2.9 percent over the
past twelve months, but were expected to accelerate
for a 4.1 percent increase over the next twelve months.
Business Activity Declines
After a sharp rebound in April from depressed readings
in February and March, the general business conditions
index in May slipped back below zero, to -3.2. Roughly
23 percent of respondents reported that conditions had
improved over the past month, while 27 percent reported
that conditions had deteriorated. The new orders index,
at -0.5, remained close to last month's level. After
a sharp increase in April, the shipments index gave
up much of the ground it had gained, falling to 4.6.
The unfilled orders index held steady at -4.4. The delivery
time index rose to zero, and the inventories index remained
below zero, at -6.5.
Prices Continue to Escalate
The prices paid index rose sharply to a record-high
69.6, with 71 percent of respondents reporting price
increases, up from 59 percent of respondents in April.
In contrast, the prices received index fell 6 points
to 15.2. Employment indexes were little changed from
last month, with the indexes for the number of employees
and the average workweek remaining near zero at 1.1.
Outlook Remains Subdued
Future indexes pointed to a guarded outlook for the
next six months. The future general business conditions
index, while somewhat above last month's level, was
low by historical standards, at 23.9. The future new
orders and shipments indexes both crept downward to
relatively low levels. The future prices paid index
rose for a third consecutive month, to 64.1, while the
future prices received index dipped to 30.4. The employment
outlook was particularly weak: the future index for
number of employees was relatively low, at 7.5, and
the future average workweek index fell below zero for
the first time in the survey's history. The capital
expenditures index remained near its April level, at
13.0, and the technology spending index slipped to 5.4,
its lowest level in several years.
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