(Kitco News) - Manufacturing activity in the New York region slid deeper into contractionary territory this month, according to the latest figures published by the New York Federal Reserve.
The regional central bank announced on Monday that its Empire State manufacturing survey declined to -16 in June, after posting a -9.2 print in May. The data was significantly worse than expectations, as consensus forecasts called for an improvement to -5.5.
“Business activity continued to decline in New York State in June,” the report said. “New orders and shipments declined. Delivery times held steady, and supply availability worsened. Inventories were little changed. Employment grew slightly for the first time in several months, while the average workweek held steady.”
“Input price increases slowed but remained substantial, while selling price increases picked up,” the Fed noted. “Firms turned optimistic about the outlook, with the future general business conditions index rising above zero for the first time since March.”
Gold prices continued to trade near the lower edge of their daily range in the moments after the 8:30 am EST release. Spot gold last traded at $3,416.12 per ounce for a loss of 0.49% on the session.
The components of the report showed conditions worsened in some areas of the region’s manufacturing sector, but improved in others.
“After rising above zero last month, the new orders index fell to -14.2, and the shipments index moved down to around zero, pointing to a decline in both orders and shipments,” the report noted. “Unfilled orders declined. The inventories index came in at around zero, signaling that business inventories held steady. Delivery times were little changed, while the supply availability index remained below zero at -8.3, suggesting that supply availability continued to worsen.”
“The index for number of employees rose ten points to 4.7, its first positive reading since January and a sign that employment increased slightly,” the Fed said. “The average workweek index came in at -1.5, suggesting little change in hours worked.”
Price pressures moderated somewhat in June compared to the previous month. “After reaching its highest level in more than two years in May, the prices paid index fell twelve points to 46.8, suggesting that the pace of price increases slowed but remained significant,” the report said. “The prices received index edged up four points to 26.6, suggesting that selling price increases accelerated somewhat.”
And firms in the region also became more positive about the business outlook this month. “After turning pessimistic in April and May, firms turned positive in June, expecting conditions to improve over the next six months,” the Fed noted. “The index for future general business conditions climbed twenty-three points to 21.2. New orders and shipments are expected to increase, and firms expect supply availability to be only slightly worse in the months ahead. Capital spending plans remained soft.”
