Manufacturing in New York state expanded in September at the second-fastest pace since 2018, dwarfing expectations on firmer shipments and orders, indicating factories are gaining momentum.
The Federal Reserve Bank of New York’s general business conditions index increased to 17 from a reading of 3.7 a month earlier, a report out Tuesday showed. In July, the measure reached the highest level since November 2018. The September gauge exceeded all estimates in a Bloomberg survey of economists and the 6.9 median projection.
Readings above zero indicates expansion, and the measure rebounded swiftly in the immediate months after collapsing to an all-time low in April when businesses were shutdown to control the pandemic. The Empire State report is the first of several regional Fed manufacturing indexes to be released this month.
Nearly 40% of respondents said that business conditions are improving, while about 23% said activity was declining. The bank’s gauge of new orders advanced to 7.1 from minus 1.7 and the shipments index climbed to 14.1 from 6.7.
A measure of the number of employees edged up to 2.6 in September from 2.4 as factories boosted hours worked instead. The Fed’s gauge of the average workweek showed growth for the first time since January.
Delivery times lengthened, prices paid for materials jumped and a gauge of prices received rose to the highest level since March.
Optimism about economic conditions over the next six months also improved among New York manufacturers. The regional Fed bank’s future index increased to a three-month high of 40.3 from 34.3.
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