The Empire State Index of General Business Conditions in New York's manufacturing industries went negative in May for the first month since April 2003. The decline to -11.11 followed a year of weakening versus the peak in February 2004 and April's level was revised down.

The new orders component dropped further into negative territory but the shipments index was slightly positive. The employment index fell to its lowest since September 2003 and the barely positive reading indicated little if any job growth. Like the Philadelphia Fed Index of General Business Conditions, the Empire State Business Conditions Index reflects answers to an independent survey question; it is not a weighted combination of the components.

The prices paid index slipped further to the lowest level since last February.

Expectations for business conditions in six months fell further and indicated the most pessimism since 2001. Expectations for future capital spending fell hard for the third month in the last five and the average level this year is below 2004.

The Empire State Manufacturing Survey is a monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York. Participants from across the state in a variety of industries respond to a questionnaire and report the change in a variety of indicators from the previous month. Respondents also state the likely direction of these same indicators six months ahead. April 2002 is the first report, although survey data date back to July 2001.

For more on the Empire State Manufacturing Survey, including methodologies and the latest report, click here.