NY manufacturing activity contracts again in October

Manufacturing activity in the New York area contracted in October for the third month in a row, according to a survey released on Monday.

The New York Fed’s Empire State general business conditions index fell eight points from September to -9.1.

According to the survey, 23% of respondents reported that conditions had improved over the month, while 32% said they had worsened.

The new orders index was flat at 3.7, while the shipments index slid 20 points to -0.3 in October. The delivery times index held near zero for a third consecutive month, and the inventories index fell to 4.6 in October from 9.4 in September. The index for unfilled orders improved to -3.7 from -7.5.

Meanwhile, the index for future business conditions declined by 10 points from September to -1.8, indicating that firms do not expect conditions to improve over the next six months.

Oxford Economics said: "Manufacturing activity will continue to decelerate in coming months, and a significant slowdown is expected heading into 2023.

"We expect weakening demand conditions domestically and abroad, high inflation, and rising interest rates will heavily weigh on growth in H1 2023. The weakness in manufacturing won't prevent the Fed from raising rates, however, as inflation remains stubbornly high."