The Empire State Manufacturing Survey indicates that conditions for New York manufacturers continued to deteriorate in June, at a moderately faster pace than in May. The general business conditions index fell 5 points, to -9.4. The new orders index remained negative and near last month’s level, while the shipments index fell 6 points to -4.8. The inventories index declined and remained well below zero. Price indexes were negative but modestly higher than in May, and employment indexes stayed below zero. Future indexes were generally positive and continued to rise, conveying an expectation that conditions should improve over the next six months. Both the capital spending and technology spending indexes rose into positive territory for the first time since October of last year.
Here is the accompanying chart:
The general business conditions index fell several points from last month’s level, dropping to -9.4, but remained well above the string of deeply negative readings observed in the October-March period. This month, 28 percent of respondents reported that conditions had improved, compared with 23 percent last month, while 38 percent of respondents reported that conditions had worsened, up from 28 percent. After rising above zero last month, the shipments index retreated to -4.8. The unfilled orders index, at -10.3, was little changed. The delivery time index rose a few points to -10.3, and the inventories index fell to -25.3.
This looks like a natural pullback in activity from the previous month. While the conditions are still negative, they have rebounded from their lows earlier in the year.
However,
Future indexes continued to rise, conveying an expectation that conditions should get better over the next six months. The future general business conditions index advanced 4 points, to 47.8, its highest level in nearly two years; 61 percent of respondents expected conditions to improve over the next six months. The future new orders index, at 45.8, suggested similar optimism, as did the future shipments index at 48.7. Input prices were expected to rise, while selling prices were expected to fall; the future prices paid index was positive, at 10.3, and the future prices received index was negative, at -5.8. The index for future number of employees surged from 0.7 last month to 16.1—a fourth consecutive monthly increase from February’s record-low -29.3. The capital expenditures index rose into positive territory for the first time since October, climbing 13 points to 11.5, and the technology spending index also rose above zero, to 1.2.
I don't know how much of this is wishful thinking and how much is based on some fact. However, it is encouraging.
