New York Manufacturing Shows Weakening in December

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Friday, December 20, 2024

Manufacturing in New York swooned in December, according to the New York Empire State Manufacturing Index (ESMI). The index is a monthly survey of approximately 200 New York State manufacturers that gauges the health of the state's manufacturing sector and is considered a key indicator of general business conditions in New York. The index fell to 0.2, significantly lower than forecasts of 6.4 and substantially lower than November’s reading of 31.2, which was the highest reading in three years. Firms remained optimistic about the six-month outlook, though less so than in November.

The ESMI is a diffusion index measuring the degree to which manufacturing activity expands or contracts. A reading above zero indicates expansion, while below zero signifies contraction. December’s survey showed a retreat in new orders and shipments indexes, although they remained positive at 6.1 and 9.4, respectively. Labor market conditions worsened, however, as the index for the number of employees moved down to -5.8, and the average workweek index fell to -3.9. Notably, the index for future business activity fell nine points to 24.6, with 42 percent of respondents expecting conditions to improve over the next six months. 

The ESMI is a reliable proxy for the broader U.S. manufacturing industry conducted by the Federal Reserve Bank of New York and is sent on the first of each month. Respondents reported the change in each indicator from the previous month and their likely direction in six months.

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