(Bloomberg Opinion) — A measure of New York state manufacturing activity plunged in January to the lowest level since the early months of the pandemic as new orders and shipments collapsed.
The Federal Reserve Bank of New York’s general business conditions index fell nearly 22 points to minus 32.9 this month, data released Tuesday showed. A reading below zero indicates contraction. The figure was more than twice as weak as the most pessimistic estimate in a Bloomberg survey of economists.
The gauge has shown contraction in five of the past six months, underscoring the depth of the hit to the manufacturing sector as the Fed raises interest rates.
At the same time, the survey showed sharp falls in measures of prices paid and received by manufacturers in the state, indicating a further weakening of inflationary pressures.
New orders fell nearly 28 points to minus 31.1, also the lowest level since May 2020 and marks the third straight month of contraction. Shipments plunged by a similar amount, to the lowest level since August.
Factory employment fell to its lowest level in more than two years, indicating that hiring has basically flattened. In addition, a workweek ratio per employee fell to the lowest level since August.
Despite the weakness of current indices, forward-looking indicators improved modestly.
Survey responses were collected from January 3-10. The report is the first of several Fed regional bank factory indices to be released in the coming weeks.
Nota Original:New York Manufacturing Activity Plunges to Lowest Since May 2020
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