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Empire State Manufacturing Survey Conditions declined in December 2023
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Business activity declined in New York State, according to firms responding to the December 2023 Empire State Manufacturing Survey. The headline general business conditions index fell twenty-four points to -14.5, continuing to oscillate around -8.6—the average observed over the past year. New orders fell for a third consecutive month, and shipments also declined. Unfilled orders continued to shrink significantly, and delivery times shortened at the fastest pace since well before the pandemic. Inventories moved lower. Employment declined modestly, and the average workweek edged down. The pace of input price increases moderated, while the pace of selling price increases held steady. After reporting a steep drop in the outlook last month, firms were a little more positive in December, but their optimism remained quite subdued.
Headline Index Continues to See-Saw
Manufacturing activity declined in New York State, according to the December survey. The general business conditions index fell twenty-four points to -14.5, continuing to oscillate around -8.6—the average observed over the past year. Eighteen percent of respondents reported that conditions had improved over the month, while thirty-two percent reported that conditions had worsened. The new orders fell six points to -11.3, pointing to a decline in orders for a third consecutive month, and the shipments index fell sixteen points to -6.4, indicating that shipments fell. The unfilled orders index held steady at -24.0, a sign that unfilled orders continued to fall significantly. After rising into positive territory last month, the inventories index retreated fourteen points to -5.2, suggesting that inventories moved lower. The delivery times index dropped ten points to -15.6, its lowest reading in several years, a sign that delivery times shortened.
Labor Market Indicators Remain Soft
The index for number of employees fell four points to -8.4, its lowest level in several months, pointing to a modest decline in employment levels. The average workweek index was little changed at -2.4, indicating a slight decline in hours worked. The prices paid index moved down six points to 16.7, suggesting an ongoing moderation in input price increases, while the prices received index held steady at 11.5, a sign that selling price increases remained modest.
Optimism Still Subdued
After plunging last month, the index for future business conditions climbed thirteen points to 12.1, a reading that suggests firms were still not very optimistic that conditions would improve in the months ahead. New orders and shipments, as well as employment, are expected to increase only modestly over the next six months. The capital spending index remained depressed at 4.2, and the technology spending index came in at 8.3, suggesting that firms’ investment plans remained weak.
Posted: December 15, 2023 Friday 08:30 AM