Manufacturing in the state of New York declined at a record rate in December, according to an industry survey released Monday morning. Despite the headline, several components that had seen all-time lows in November, including new orders, employment, and shipments, improved this month.
The New York Fed's Empire State Manufacturing fell to -25.8 from the previous month's -25.4, marking a new low in the survey since its inception in 2001. The results are better than the consensus forecast of a -27.5 reading.
The reliability variance of the index is +/- 8.6 points. A reading above 0 indicates growth in the manufacturing sector, while a negative reading indicates slowdown.
"The new orders and shipments indexes also remained near their recent record lows, and the unfilled orders index dropped to a new low," the report said.
New orders improved slightly to -20.8 from the prior month's -22.2, marking the third straight month of contraction. Shipments moved up to -8.8, up from -13.9 in November.
The employment index continued to deteriorate with a -23.4 reading, following the steep 25-point decline to -28.9 in November. Employment has now been in decline for five consecutive months in this survey.
The prices paid index continued its rapid moderation to -7.5 in December, down from +20.5 in November. In July, the index hit a peak of +77.9. This is the first negative reading for prices since 2003.
The NY manufacturing survey began in 2001. All components, including the headline, are created by using a diffusion method in which the percentage of respondents who saw a decrease is subtracted from the percentage that saw an increase.
Data is retrieved from the same group of 175 manufacturing executives polled on the first business day of each month.
By Patrick McGee and edited by Nancy Girgis
©CEP News Ltd. 2008