New York Factory Activity Contracts While Outlook Improves
New York state factory activity shrank in June by more than projected as orders and shipments contracted, though expectations improved.
The Federal Reserve Bank of New York’s general business conditions index declined nearly 7 points to minus 16, marking a fourth straight month of contraction, data showed Monday. Readings below zero indicate contraction. The median forecast in a Bloomberg survey of economists called for a reading of minus 6.
The outlook for business conditions in the next six months jumped more than 23 points, the most in nearly five years when the economic activity began to recover after the pandemic shutdowns. Expectations for orders and shipments rebounded sharply from a month earlier.
The survey responses were collected between June 2-9, shortly before the US and China reached a temporary agreement to de-escalate a trade war. The two nations agreed to a framework after two days of trade talks in London that implements the consensus reached in Geneva to lower duties.
Meanwhile, an index of current prices paid for materials decreased by more than 12 points, the most in almost two years, to 46.8. Manufacturers’ expectations for prices also declined.
At the same time, a gauge of current prices received rose to the second-highest level since early 2023. The outlook for prices charged also increased.
Manufacturing has struggled against a backdrop of rising input prices and trade policy uncertainty. Producers are also contending with customers who are hesitant to make investments until there’s more clarity on duties and tax policy being debated in Congress.
The New York Fed report showed current new orders declined more than 21 points to minus 14.2, while an index of shipments slid to minus 7.2. Both indexes were the weakest in three months.
Source : Bloomberg
