Empire State Manufacturing: Factory Activity Declines Sharply

Bottom Line: General business conditions for New York manufacturers contracted for the 7th consecutive month, more than market expectations. Both new orders and shipments declined but the 6-month outlooks of survey participants improved modestly. Hiring expectations fell and were better than in January and December. On an ISM weighted basis Empire State fell by -6.9% vs. -15.8% last month. Overall this was still a concerning start to the release of several regional manufacturing surveys over the coming weeks. The Empire State Manufacturing Index ROSE by 2.7 point in February to -16.6%, compared with market expectations for a decline to 10.0%. On an ISM-weighted basis, the index deteriorated, but less than the headline, indicating that the details were less weak than the headline figure. New Orders declined by 11.6% compared to -23.5% last month. Shipments also declined by 11.6%. Consequently, Unfilled Orders continued to decline. Inventories were unchanged after declining for 7 consecutive months. Prices Paid index decelerated sharply and is rising only modestly. Prices Received index declined for the 6th consecutive month. Employment fell by -1.0% while Average Workweek declined for the 7th consecutive month. The 6-Month Outlook improved modestly.