New York Manufacturing Survey Shows Contraction

For the seventh straight month, the Empire State report is signaling significant contraction for the manufacturing sector. The general business conditions index for February came in below low-end expectations, at minus 16.64 vs even deeper contraction of minus 19.37 in January. New orders, at minus 11.63, are in contraction for a ninth month in a row while employment, though improving to minus 0.99 from minus 13.00, is in contraction for an eighth month in a row.

Shipments are in contraction at minus 11.56 with unfilled orders at minus 6.93. The workweek is at minus 5.94. One reading in the plus column is the six-month outlook, up nearly 5 points to 14.48 which, however, is unusually low for this reading which usually tracks in the 30s and 40s. Price data show marginal improvement for inputs but contraction for finished goods.

This report is showing its weakest run by far of the recovery and, unfortunately, points to extended weakness for the nation's factory which is getting hit by weak exports and weak energy markets at home.

Recent History Of This Indicator:
The Empire State report has been signaling decisive weakness for the factory sector since way back in August with January's minus 19.37 an especially upsetting headline. Orders and backlog orders are in a long run of contraction with recent weakness accelerating and pointing to even weaker headlines in the months ahead. Employment has been crumbling as has the 6-month outlook. Forecasters see only marginal relief for February with the Econoday consensus at minus 10.00.