(Kitco News) - Manufacturing activity in the New York region fell deep 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 -8.7 in September, after posting an 11.9 print in August. The data was far worse than expectations, as consensus forecasts called for a decline to 5.0.
“Business activity declined modestly in New York State in September, according to firms responding to the Empire State Manufacturing Survey,” the report said. “The headline general business conditions index dropped twenty-one points to -8.7, its first negative reading since June.”
“New orders and shipments fell sharply,” they noted. “Delivery times were steady, and supply availability worsened somewhat. Inventories edged lower for a second consecutive month. Employment held steady, while the average workweek declined modestly. The pace of input price increases was still elevated, though slower than last month, while the pace of selling price increases remained moderate. Capital spending plans continued to be soft. Firms expected some improvement in conditions in the months ahead, but optimism remained subdued.”
Gold prices rose briefly back into positive territory in the moments after the 8:30 am EST release. Spot gold last traded at $3,642.59 per ounce for a virtually flat reading of -0.01% on the session.
The components of the report showed conditions worsening on balance across the region’s manufacturing sector.
“The new orders index declined thirty-five points to -19.6, and the shipments index fell thirty points to -17.3, the lowest levels for both indexes since April 2024, pointing to significant declines in orders and shipments,” the report said. “Unfilled orders fell. The inventories index remained modestly negative at -4.9, indicating that business inventories continued to shrink somewhat. Delivery times were unchanged. The supply availability index dropped to -8.8, a sign that supply availability continued to worsen.”
Employment was flat in the region. “The index for number of employees came in at around zero, suggesting that employment was little changed after increasing for the prior three months, while the average workweek index declined to -5.1, pointing to a modest drop in hours worked.”
Price pressures also remained high in the New York region. “The prices paid index fell eight points to 46.1, a sign that input price increases slowed but remained steep, while the prices received index was little changed at 21.6, indicating that selling prices continued to rise at a moderate pace,” they noted.
Looking ahead, the New York Fed said that optimism in the manufacturing sector has been dampened. “The index for future general business conditions came in at 14.8, suggesting that firms expect conditions to improve somewhat in the months ahead, but optimism remained subdued,” they said. “New orders and shipments are expected to increase, and supply availability is expected to be little changed. The future employment index fell to near zero, a rare occurrence suggesting that employment levels are not expected to increase over the next six months. Capital spending plans remained soft.”
