Empire State Manufacturing Survey Contracts for Fourth Consecutive Month in November

The New York Federal Reserve’s Empire State Manufacturing Survey fell deeper into contraction territory in November, marking the fourth straight month in contraction. The gauge increased slight to -10.74, up from -11.36 in October. Wall Street expected a far bigger rebound to -6 in November.

Readings for the Empire State Manufacturing Survey above 0 indicate expansion or growth, while those below indicate contraction.

Labor market conditions continued to weaken in the latest survey, as the index for number of employees was little changed at -7.3. Employment levels have fallen for a third consecutive month, and the average workweek index also fell by 7 points to -14.6, which is its lowest level since mid-2011. The prices paid index edged up to 4.6, suggesting that input prices increased somewhat after holding steady last month. The prices received index remained negative at -4.6, indicating that selling prices declined for a third consecutive month.

New orders and shipments also declined, although at a slower pace than last month. Price indexes suggested that input prices increased slightly, while selling prices were slightly lower. Labor market conditions continued to deteriorate, with survey indicators pointing to a decline in both employment levels and hours worked. Indexes for the six-month outlook were little changed from last month, and suggested that optimism about future conditions remained tepid, even though employment is expected to increase.

PPD has reported extensively on the manufacturing sector essentially going on life support throughout 2015, and there is no sign or expectations things will get better in the region going into the first half of 2016.

The six-month outlook was unchanged in Nov., indicating that optimism about future business conditions remained nil. The index for future business conditions actually fell slightly lower to 20.3, while the indexes for future new orders and future shipments also edged lower. However, employment index showed manufacturers expected conditions in that area to improve, gaining to 16.4. The index for expected workweek rose to 5.5. The capital expenditures index was little changed at 12.7, and the technology spending index fell four points to 1.8.