Manufacturing activity in the New York area is still in contraction.
The latest Empire State manufacturing index came in at -16.64 for February, missing expectations, and remaining in contraction for a seventh month running.
Economists had estimated that the reading on manufacturing activity in the state was -10.50, according to Bloomberg, following the disastrous print of -19.37 last month.
The New York Fed noted in its last report that business activity dropped more sharply than at any time since the recession. It improved a bit this month. The new orders index also climbed, as orders fell at a slower pace than in January.
The ‘number of employees’ index improved, although overall employment stayed relatively the same. An increase in the index for those reporting more workers happened alongside those reporting an unchanged level.
Confidence about future business conditions improved but remained low.
Manufacturing activity has been hammered in recent months by the strengthening of the dollar which made goods pricier, and weak global demand.
“So far during the course of the recovery, the soft patches have tended not to last too long, however this one has been significantly deeper and longer lasting,” noted Jefferies’ Ward McCarthy to clients. “The index has been below zero for 7 straight months, which hasn’t happened since December 2008 through June 2009. The continued weakness in commodity prices is likely going to continue to weigh on business conditions, but we expect that things will improve if prices rebound.”
Here’s a chart of the general business conditions index, which shows that it fell to a seven-year low last month and rose a little in February:
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