Link Securities | The Empire State Manufacturing Index of manufacturing activity in New York, compiled by the New York Federal Reserve, unexpectedly slipped to -31.8 points in May, down from 10.8 points in April, and versus the expected reading of -3.75 points by the analyst consensus. The reading is the lowest in four months, pointing to a sharp drop in manufacturing activity in New York. New orders (-28.0 points vs 25.1 points; April) and shipments (-16.4 points vs 23.9 points; April) plunged after rising significantly in the previous month.
In addition, lead times shortened (-5.7 points vs 0; April) and inventories contracted (-12.3 points vs 8.2 points; April); and both employment (-3.3 vs -8.0; April) and hours worked (-3.5% vs -6.4% points; April) declined for the fourth consecutive month. At the same time, prices increased slightly (34.9 points vs 33.0 points; April) and capital consumption plans slowed their growth (to 0.9 points, their lowest reading in three years). Meanwhile, the six-month business conditions index rose only marginally to 9.8 points from 6.6 points in April, a sign that businesses expect a slight improvement in conditions over the next six months.
