The Empire State index for the month of March stood at 17.4 points, an increase of 5.3 points compared to February and more than the 15 points expected by analysts.
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Manufacturing activity in the New York area soared in March to its highest level since July 2020, and prices paid to suppliers are at their highest in 10 years, according to the Empire State monthly indicator released by the Fed on Monday. .
The index measuring general business conditions stood at 17.4 points (+5.3 points compared to February), more than the 15 points expected by analysts. “Commercial activity has grown at a sustained pace in New York State,” notes the Central Bank in its press release.
An index greater than zero shows that the activity is still growing.
Prices paid to suppliers continue to rise at a very rapid pace, taking 7 points to stand at 64.4 points, their highest level in a decade, reflecting tensions in the supply chain.
New orders increased in March, but less than in February, and the index measuring them stands at 9.1 points (-1.7 points). Shipments of products leaving the factory have increased significantly, but delivery times are lengthening. As for stocks, they are also higher.
After a nice improvement in February, the employment situation in the sector remains stable, but business leaders in the sector are optimistic for the months to come. “The employment outlook index has reached its highest level in more than ten years, which suggests that companies largely expect to hire in the coming months,” notes the Fed.
The $ 1.9 trillion stimulus package passed in Congress, and signed Thursday by President Joe Biden, is expected to accelerate consumption growth. The first checks for $ 1,400 per person were sent out this weekend.
But in the longer term, the growth of the manufacturing sector should slow down as summer approaches, as the vaccination of a large part of the American population will allow the reopening of many activities such as bars, restaurants, tourism. A large part of the expenditure should then be directed towards services, rather than towards goods.
“However, the manufacturing sector will remain solid overall in 2021,” predicts Kathy Bostjancic, analyst for Oxford Economics.
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