Orders and shipments declined, and the New York State manufacturing industry contracted unexpectedly in October

The Zhitong Finance App learned that the New York State manufacturing industry experienced an unexpected contraction in October, which is in line with the overall downturn in the manufacturing industry. According to the Federal Reserve Bank of New York's Imperial State Manufacturing Survey, the manufacturing index fell 23.4 points to -11.9 points in October. A reading below zero indicates that economic activity is shrinking. This figure is also lower than all Bloomberg forecasts for economists. Despite the current contraction in business activity, the overall economic activity outlook index for the next six months rose to 38.7, reaching the highest level in three years, showing the optimism of manufacturers about the economic outlook.

According to the New York Federal Reserve's report, the new orders index fell nearly 20 points to minus 10.2, while the shipment volume index fell nearly 21 points to minus 2.7. Despite this, the employment index rebounded to 4.1, the first expansion in a year, while the working hours index also increased. Furthermore, the material price payment index rose to a six-month high of 29, while the price index received by manufacturers also accelerated.

Against the backdrop of high borrowing costs, sluggish export markets, and the upcoming general election, many companies have limited capital expenditure, making overall factory activity difficult. The broader US manufacturing index published by the American Institute for Supply Management (ISM) has been in a contraction range for all but one month since the end of 2022.

Richard Dietz, an economic research consultant at the New York Federal Reserve, said that although manufacturing activity in New York State contracted slightly in October and new orders declined, the survey showed a slight decline in shipments and a slight deterioration in supply conditions. However, the employment rate increased for the first time in a year, and although modest, optimism about the outlook grew strongly.

According to the survey, indicators of future business activity have risen to the highest level in many years. 55% of respondents expect the situation to improve in the next few months, while only 16% expect the situation to worsen.