Business activity grew at a more subdued pace in New York State, according to firms responding to the April 2017 Empire State Manufacturing Survey. The headline general business conditions index fell eleven points to 5.2. The new orders index, which had climbed to a multiyear high in March, retreated sharply to 7.0 in April, suggesting more modest growth. The shipments index edged up to 13.7, indicating that shipments continued to increase moderately. The unfilled orders index edged down to 12.4, after reaching its highest level in more than a decade in March; however, delivery times lengthened further, with that index climbing to a record high of 16.1. Labor market indicators pointed to further sturdy increases in both employment and hours worked. Input prices and selling prices rose at a modest pace again this month. Indexes assessing the six-month outlook continued to convey a fairly high degree of optimism about future conditions.

Business Expansion Slows
Responses from New York State manufacturers suggested that business activity expanded at a considerably slower pace than in the prior two months. Although the general business conditions index remained above the levels seen through most of 2016, it slipped eleven points to 5.2. Thirty-five percent of respondents reported that conditions had improved over the month, while 30 percent reported that they had worsened. The new orders index retreated fourteen points to 7.0, indicating that orders continued to expand but at a much more subdued pace. The shipments index, up slightly at 13.7, suggested that shipments continued to increase at a moderate pace. The unfilled orders index, which had reached an eleven-year high in March, declined only marginally to 12.4 in April. The delivery time index continued its ascent, climbing six points to 16.1—its highest level in the survey’s sixteen-year history and a sign of markedly longer delivery times. The inventories index moved back above zero but only slightly, indicating that inventory levels were little changed.

Employment Indexes Signal Strong Labor Market
Employment indexes continued to signal strength in the labor market. The index for number of employees climbed another five points to 13.9—its highest level in just over two years. The average workweek index retreated six points to 8.8, but remained well above the levels that prevailed for most of the past five years. Price increases were about the same as in March. The prices paid index edged up two points to 32.8, and the prices received index rose four points to 12.4.

Firms Remain Optimistic
Forward-looking indexes were mixed but generally at high levels, suggesting fairly widespread optimism about future conditions. The index for future business conditions rose three points to 39.9, while the future new orders and shipments indexes declined modestly. Employment and hours worked were expected to increase fairly briskly in the months ahead. The index for planned capital expenditures climbed four points to 27.7—its highest level in more than two years—and the technology spending index jumped seven points to 15.3.