Empire State Manufacturing Signals Struggling Industrial Sector

The Empire State Manufacturing Index is a monthly survey of manufacturers in the New York region. Firms report on how business conditions have changed in various areas, including production, new orders, employment, prices and company outlook. The Index is a regional survey, but it is highly correlated with state-level measures of business activity and employment. According to the Empire Manufacturing Index, general business activity in June decreased to 2.29 from 17.09 in May. This is worse than the expected estimate of 12.5. Essentially, this is bearish for the manufacturing sector and is likely negative for general economic growth. According to the report, the June Empire State Manufacturing Survey indicates that manufacturing activity expanded slightly over the month. The general business conditions index fell fifteen points, but remained positive at 2.3. The new orders index declined six points to 2.2, and the shipments index fell a steep nineteen points to 4.8. Price indexes were markedly lower, with the prices paid index falling eighteen points to 19.6 and the prices received index dropping eleven points to 1.0. Employment indexes also retreated, athough they still indicated a small increase in employment levels and a slightly longer average workweek. Indexes for the six-month outlook were generally lower than last month's levels, suggesting that optimism was waning somewhat, with the future general business conditions index falling to 23.1, its fifth consecutive monthly decline.