Manufacturing Activity Declines in New York State
Delivery Times and Supply Availability
Delivery times shortened somewhat, as indicated by the delivery times index at -4.1. The newly introduced supply availability index recorded a -1.0, showing little change in the availability of supplies.
Labor Market Conditions
The labor market continued to struggle, with the number of employees index at -8.7, showing a further decline in employment levels. The average workweek index dropped to -9.9, indicating a reduction in hours worked. These figures highlight ongoing weakness in the labor market within the manufacturing sector.
Price Movements
The pace of price increases for both inputs and outputs moderated for the second consecutive month. The prices paid index decreased by four points to 24.5, and the prices received index fell by seven points to 7.1, its lowest level in a year. This moderation suggests a cooling off in the inflationary pressures within the manufacturing sector.
Optimism for the Future
Despite the current weak activity, there was a notable increase in optimism regarding the six-month outlook. The index for future business conditions surged sixteen points to 30.1, with nearly half of the respondents expecting better conditions ahead. However, the outlook for employment growth remained pessimistic, and capital spending plans continued to appear sluggish.
Market Forecast
The June 2024 Empire State Manufacturing Survey presents a mixed outlook. The modest decline in business activity and ongoing labor market weaknesses point to continued challenges in the near term. However, the significant rise in future business optimism suggests a potential turnaround in the latter half of the year. For traders, the current data indicates a cautious approach is warranted, given the bearish undertones of the present conditions. Nonetheless, the increasing optimism could signal a bullish shift in market sentiment if upcoming data supports this positive outlook.
