U.S. Empire State Manufacturing Index Rebounds to a Still-Negative Level in April
Summary
- General Business Conditions Index -14.3 in Apr. vs. -20.9 in Mar., showing contraction for the fifth straight month.
- Negative numbers for new orders (-16.2), shipments (-14.4), unfilled orders (-10.1), and employment (-5.1), but positive reading for inventories (3.4), the first positive since Nov. ’23.
- Inflation pressures increase, w/ prices paid rising to 33.7, the highest since May ’23.
- Optimism on the six-month outlook remains positive but subdued, w/ Future Business Conditions Index down to a four-month-low 16.7.
The Empire State Manufacturing Index of General Business Conditions was at -14.3 in April, up from -20.9 in March but down from -2.4 in February, according to the Empire State Manufacturing Survey released by the Federal Reserve Bank of New York. A reading of -7.0 had been expected in the Action Economics Forecast Survey. The April weaker-than-expected result, down from a positive 10.8 reading in April 2023, indicated that the business activity in New York State contracted for the fifth consecutive month but at a less severe pace compared to March. The percentage of respondents reporting an increase in general business conditions was 23.8% in April, down from 25.1% in March; the percentage reporting a decrease was 38.1%, down from March’s 46.0%. The latest survey was conducted between April 2 and April 9.
The headline index reflects the answer to only one question concerning general business conditions and is not calculated from the components. Haver Analytics constructs an ISM-adjusted series, which is comparable to the ISM manufacturing index. This calculated index rebounded to 46.0 in April after a 2.9-point decline to 45.5 in March, indicating contraction for the fifth successive month but at a slightly less severe rate; it was up from a low of 39.7 in January but down from 54.9 in April 2023. A level of 50 is the breakeven point between expansion and contraction.
In the latest survey, the new orders index increased to -16.2 in April after a 10.9-point drop to -17.2 in March, remaining negative for the seventh straight month; it was an improvement from a low of -49.4 in January. A 24.3% of respondents reported higher orders in April while an increased 40.5% reported lower orders. The shipments index decreased to -14.4 in April, the fourth negative reading in five months, from -6.9 in March, but it was up from a low of -31.3 in January.
The unfilled orders index rebounded to -10.1 in April from -10.9 in March, albeit remaining in a negative territory for the 12th consecutive month and signaling that unfilled orders continued to fall. The index reached a low of -24.2 in January. The inventories index recovered to a positive 3.4 reading in April from -12.9 in March, indicating inventories expanded for the first time since November. Meanwhile, the delivery times index fell to -7.9 in April from -1.0 in March, with 9.0% of respondents reporting higher delivery times and 16.9% of respondents reporting lower delivery times.
Labor market conditions remained weak this month. The number of employees index increased to -5.1 in April following a 6.9-point drop to -7.1 in March, showing employment contracted for the sixth consecutive month but at a slightly less severe pace. The index was up from a low of -10.1 in March 2023. A 12.7% of respondents reported increases in employment in April while an increased 17.7% reported lower employment. The average workweek fell to -10.6 in April, the lowest reading since August 2023, on top of a 5.7-point drop to -10.4 in March, remaining below a high of 24.3 in September 2021.
Inflation pressures increased this month. The prices paid index rose to 33.7 in April, the highest level since May 2023, after declining to 28.7 in March. The index was up from a low of 16.7 in December 2023 but significantly down from a high of 86.4 in April 2022. An increased 36.0% of respondents reported higher prices paid in April while only 2.2% reported lower prices paid. The prices received index declined to a three-month-low 16.9 in April after rising to 17.8 in March. The index was up from a low of 3.9 in July 2023 but well below 56.1 in March 2022. A 20.2% of respondents reported higher prices received in April while a lessened 3.4% reported lower prices received.
Expectations for the next six months generally improved in April but remained subdued. The index for future business conditions declined to a four-month-low 16.7 in April after increasing to 21.6 in March, with 37.4% of respondents expecting business conditions to improve in the next six months. Growth expectations for employment (4.5 vs. 18.3), new orders (17.9 vs. 29.3) and shipments (21.8 vs. 33.7) weakened in April vs. March but remained in a positive territory. Capital spending plans remained soft, with expectations for capital spending falling to a four-month-low 6.7 in April from 11.9 in March. Expected prices paid rose to 40.4 in April, the highest level since February 2023, from 35.6 in March, while expected prices received declined to 29.2 from March’s 32.7.
The New York Fed survey data are contained in Haver’s SURVEYS database. The expectations series is in Haver’s AS1REPNA database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has ~20 years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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