New York’s manufacturing activity returns to growth in July

Washington (awp/afp) – Manufacturing activity in the New York region returned to growth in July after two months of contraction, according to the monthly Empire State index published Friday by the American central bank (Fed).

The index gained 12.3 points to return to positive territory, at 11.1 points, after a sharp fall in May, which had not been completely caught up in June, according to this survey carried out among manufacturers of the region. Activity is considered contracting when the index is below zero.

The sharp rise went against the consensus of analysts who expected activity to remain in the red at -0.9 points.

With a modest increase in new orders (+0.9 to 6.2 points), it is mainly shipments of goods that are at the origin of this unexpected figure with an increase of 21.3 points (to 25.3 points ).

Unfulfilled orders fell for a second consecutive month by -0.9, to -5.2 points.

The index for the number of employees held steady at 18.0, indicating a “solid increase in employment”

Respondents also report that prices paid and prices received have “moved significantly lower,” which the Fed says indicates “a deceleration in price increases.”

And companies are “becoming pessimistic” about the future economy, the Fed said.

They expect activity to decline over the next six months, “a sentiment expressed only three times in the history of the index”.

The component measuring the economic environment for the coming months thus fell by a staggering 20.2 points in July, to -6.2.

Companies do not expect orders to increase, and expect shipments to be only “a little higher,” the Fed said.

afp/rp

–