By Nihad Ahmed
Factory activity in the New York state swung to a sharp decline in August and business conditions aren't expected to improve much in the short term, according to a survey from the Federal Reserve Bank of New York released Monday.
The Empire State Manufacturing Survey's general business conditions index tumbled to minus 31.3 from 11.1 in July, marking the second-largest monthly decline in the index on record. Economists polled by The Wall Street Journal had expected a reading of 5.
The indicator, which is based on a survey of manufacturing firms in the New York area, signals that factory activity dropped steeply as a reading below zero suggests contraction.
Of the respondents, 44% reported that conditions had worsened while 12% reported that conditions had improved.
The new orders index dropped to minus 29.6 in August from 6.2 the previous month, and the shipments index plummeted to minus 24.1 from 25.3, indicating a sharp drop in both orders and shipments.
The index for number of employees fell to 7.4 from 18.0, signaling a small increase in employment.
Inflation pressures persisted but weakened over the month. The prices paid index fell to 55.5 from 64.3, its lowest level in more than a year, indicating a deceleration in input-price increases. The prices received index was little changed, coming in at 32.7 compared with 31.3 in July.
Firms showed little optimism about business conditions in the next six months, with the index for future business conditions coming in at 2.1, although they were much more pessimistic in July with the subcomponent at minus 6.2.
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(END) Dow Jones Newswires