NY Fed Reports State Economy Rebounding

Some Numbers Show Increase But Optimism Dips

Keith Griffin

July 30, 2020

Welder at manufacturing facility | Image by Mike Flynn from Pixabay

Business activity increased in New York State for the first time in several months, according to firms responding to the July 2020 Empire State Manufacturing Survey. The headline general business conditions index rose to 17.2, its first positive reading since February.

The report says employment levels and the average workweek were little changed. Input price increases were not much different than last month, while selling prices edged lower. Firms remained optimistic about the six-month outlook, though less so than in June.

The index for number of employees edged up to 0.4, signaling that employment levels were steady. Notably, 22% of firms said that employment levels increased in July, the same proportion that reported a decrease.

After rising sharply last month to a multi-year high, the index for future business conditions fell eighteen points to 38.4, suggesting that firms remained optimistic about future conditions, though less so than in June. The indexes for future new orders and future shipments fell somewhat, but remained near 40. The index for future employment rose to 21.1, suggesting firms expect to increase employment in the months ahead. The capital expenditures index rose to 9.1, a sign that firms, on net, planned to increase capital spending.

Manufacturing firms in New York State reported that business activity increased in July, marking the first such pickup since the pandemic began. The general business conditions index rose above zero, climbing seventeen points to 17.2, its third consecutive monthly increase. Forty-one% of respondents reported that conditions had improved over the month, while 24% reported that conditions had worsened.

The new orders index rose 15 points to 13.9, indicating that orders increased, and the shipments index climbed 15 points to 18.5, pointing to a solid increase in shipments. Unfilled orders were unchanged. Delivery times were slightly longer, and inventories declined.

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