In October 2024, manufacturing activity in New York state fell back into contraction, as reported by the Empire State Manufacturing Survey. The general business conditions index dropped significantly by 23 points to -11.9, marking a stark reversal from a brief recovery observed in September. This decline indicates a challenging environment for manufacturers in the region, as the index reflects a decrease in overall business conditions [6e458452].
Adding to the concerns, U.S. factory orders fell for the second consecutive month in September 2024, decreasing by 0.5% after a downwardly revised 0.8% drop in August. Economists had predicted a similar decline of 0.5%. Notably, orders for non-defense capital goods excluding aircraft rose by 0.7% in September, but core capital goods shipments decreased by 0.1%. Furthermore, non-defense capital goods orders dropped by 4.4%, and shipments fell by 3.4%, indicating a slowdown in business investment in equipment for the third quarter of 2024 [1b513158].
Previously, the Dallas Fed Manufacturing Index had shown signs of improvement, remaining in negative territory with a reading of -14.5. However, the Production Index improved to +4.8 from -4.1, indicating an increase in production activity. Capacity Utilization also saw an uptick, suggesting a higher utilization of manufacturing capacity. Despite these improvements, New Orders declined, signaling a decrease in demand [0956004d].
In contrast, the Empire State Manufacturing Index's decline in October highlights a broader trend of mixed signals within the manufacturing sector. The May Empire State Manufacturing Index had previously recorded a reading of -15.60, which was lower than expected, and indicated ongoing struggles with new orders and shipments [7673e214].
The Richmond Fed Manufacturing gauge for May had shown some positive momentum, rising to 0 and exceeding consensus forecasts. However, the recent contraction in New York suggests that the manufacturing landscape remains volatile [8defdc37].
Additionally, the Philly Fed Manufacturing Index for June had reported a contraction at -1.3, indicating a slowdown in manufacturing activity. This mixed performance across various regions underscores the challenges facing the manufacturing sector in the U.S. economy [64a3eef4].
Overall, while some areas like Dallas showed signs of recovery, the recent contraction in New York state manufacturing and the decline in factory orders reflect ongoing uncertainties and challenges within the sector. The decline in the Empire State Manufacturing Survey and the drop in factory orders serve as reminders of the fluctuating nature of business conditions and the need for continued monitoring of economic indicators [218efa56], [6e458452], [1b513158].