New York State manufacturing activity increased at its fastest pace in over four years in August. (Graphic provided by Federal Reserve Bank of New York)
Manufacturing activity in New York state strengthened sharply in August, with firms reporting the strongest business conditions in more than four years, according to the latest Federal Reserve Bank of New York’s Empire State Manufacturing Survey.
The general business conditions index rose five points to 20.6, its highest level in more than four years. Readings above zero indicate that manufacturing activity is expanding.
New orders and shipments also continued to increase. The new orders index came in at 17.3, while the shipments index was 11.7, pointing to solid gains in both measures.
At the same time, manufacturers reported growing backlogs and longer delivery times. The unfilled orders index climbed 11 points to 15.5, while the delivery times index rose eight points to 20.6. Inventories declined.
Supply constraints remained a concern. The supply availability index fell three points to -13.4, signaling worsening availability of materials and other inputs.
The state’s manufacturing labor market also continued to expand. The index for number of employees came in at 9.3, while the average workweek index increased to 6.9, suggesting manufacturers are adding workers and increasing hours.
Inflationary pressures remained elevated. The prices paid index rose six points to 58.6, indicating a pickup in input-cost increases. The prices received index fell five points to 22.7, suggesting manufacturers moderated their selling-price increases, although they remained elevated.
Manufacturers remained optimistic about the months ahead. The index for future business conditions increased four points to 32.1.
Firms expect new orders and shipments to increase significantly over the next six months, with employment also expected to pick up strongly. Supply availability is expected to worsen, however, while price increases are expected to remain elevated.
Capital spending plans remained modest.
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