Empire State Manufacturing Survey in February Remains Stuck in Contraction

The Empire State Manufacturing Survey, the New York Federal Reserve’s gauge of manufacturing activity in the region, remained stuck in contraction territory in February. The gauge came in with a slightly improved reading of -16.64 from -19.37 in January. Economists had expected the Empire State Manufacturing Survey to rise to -10. Readings above 0 point to expansion, while those below indicate contraction.

The New York Federal Reserve said the six-month outlook remained weak, with the index for future general business conditions up only slightly from last month’s multi-year low.

Employment levels also remained virtually unchanged from the month prior, as the index for number of employees rose 12 points to -1.0, indicating that employment levels were flat. The average workweek index was also flat at -6.0, suggesting the average workweek shortened.

The prices paid index dropped 13 points to 3, indicating a slight increase in input prices. The prices received index, down nine points to -5.0, suggested a small decline in selling prices.

After falling sharply in January, the six-month outlook showed optimism about future business conditions remained weak. The Empire State Manufacturing Survey did report a small silver lining.

The index for future business conditions rose five points to 14.5. The indexes for future new orders and future shipments recovered somewhat after their steep declines in January, rising modestly to readings in the low 20s. Employment was expected to increase, with the index for expected number of employees climbing to 16.8. The capital expenditures index held steady at 12.9, and the technology spending index edged down to 5.9.