New York Manufacturing Reaches Its Strongest Level Since 2022 as Lead Times and Costs Rise
Manufacturing activity in New York state expanded in May, with the headline business conditions index rising 8.6 points to 19.6, the highest reading since April 2022. The new orders index increased 3.4 points to 22.7, while the shipments index declined 1.3 points to 18.9, both remaining at high rates of growth for the second consecutive month. Unfilled orders decreased 4.2 points to 4.9, while inventories moved up 4.6 points to 9.7, indicating business inventories are growing at a faster pace. Delivery times lengthened to a four-year high, climbing 8.3 points to 20.4, and supply availability worsened slightly, edging down 0.6 points to -10.7.
Employment increased at a slower rate in May, with the index for the number of employees falling 1.5 points to 8.3. At the same time, the average employee workweek declined to 11.5 from 13.7, signaling a smaller increase in hours worked in May. The prices paid index jumped 11.6 points to 62.6, while the prices received index soared 10.0 points to 31.8, reflecting the fastest pace of increase in both prices paid and prices received since 2022.
In May, firms’ optimism regarding the future improved notably, with the future business activity index rising 13.9 points to 33.5. In the next six months, new orders are expected to rise at a faster pace compared to the prior month at 30.1. The future employment index moved up 2.5 points to 20.6, suggesting an anticipated faster pace of employment growth over the next six months. Meanwhile, input and selling price expectations are forecasted to increase at a faster pace, rising from 61.6 to 62.1 and from 38.6 to 43.6, respectively. Furthermore, capital spending plans strengthened in May, increasing from 13.1 to 15.5.