(Bloomberg) -- New York state factory activity swung back into contraction territory this month as orders and shipments weakened, consistent with lackluster manufacturing.
The Federal Reserve Bank of New York’s October general business conditions index slid 23.4 points to a five-month low of minus 11.9, figures issued Tuesday showed. Readings below zero indicate contraction, and the figure was weaker than all estimates in a Bloomberg survey of economists.
At the same time, the six-month outlook for overall activity increased to a three-year high of 38.7, indicating the state’s manufacturers are more upbeat about the economy’s prospects.
The Empire State data have been prone to wide swings on a monthly basis for more than two years. The report is the first of several regional Fed bank factory indexes set for release in the coming weeks.
A measure of current new orders dropped nearly 20 points to minus 10.2 after climbing a month earlier to the highest since April 2023. The index of shipments decreased almost 21 points to minus 2.7.
The employment index, however, rebounded to 4.1 — the first expansion in a year — while a measure of hours worked also climbed.
Meanwhile, the New York Fed’s gauge of prices paid for materials increased to a six-month high of 29, while an index of prices received by state manufacturers also accelerated.
Factory activity overall has been struggling as many companies limit capital spending against a backdrop of still-high borrowing costs, sluggish export markets and next month’s election. A broader gauge of US manufacturing, issued by the Institute for Supply Management, has been stuck in contraction territory for all but one month since late 2022.
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