The New York Fed gave us the first regional reading on manufacturing conditions this morning with the release of the Empire State Manufacturing Survey. The headline number rose back into expansion at 9.1, well above expectations of an improvement to only -3. Although the current conditions index improved, expectations dropped a massive 24 points month over month. That ranks as the fourth largest one-month decline in this reading on record behind September 2001 and January 2009.
Below we show a breakdown of each category of the report for both current conditions and 6-month expectations indices. Although General Business Conditions improved dramatically, breadth was otherwise negative.Of the other categories, only three rose month over month. Expectations likewise had more categories falling than rising leaving multiple categories at or near the bottom of their respective historical ranges dating back to the start of the survey in 2001.
The report indicated weak demand as new orders currently remain in contraction. Meanwhile, Unfilled Orders are far more depressed at -23.2 making the November reading the lowest since December 2014. Shipments have been increasingly choppy during the post-pandemic period, but the November reading did improve up to 10, slightly below the historical median. Meanwhile, Inventories were much more elevated. Rising 11.2 points month over month, inventories are now in the top decile of their historical range with the first expansionary reading in six months.
Employment metrics were also weak with both the number of employees and average workweek indices sitting in contraction. However, these were also two of the strongest categories relative to historical ranges of anywhere in the report. In fact, Average Workweek expectations hit the highest level since March of last year. While those labor expectations remain healthy, the same cannot be said for capital spending. Expected tech spending hit a new post-pandemic low while capital expenditure plans likewise returned to the low end of its range. More By This Author:Small Business Sales Get SlammedSmall Businesses Start To Worry About Rates CPI Reactions Slide