The Federal Reserve Bank of New York has reported that the Empire State Manufacturing Index for May came in below expectations. The index, which measures manufacturing activity in New York, fell to -31.8, significantly below analysts’ forecasts of -3.75. This followed a positive reading of +10.8 in April.
The latest index figure indicates a contraction in New York’s manufacturing sector, with sluggish demand being the main contributing factor. The report revealed that new orders had plummeted, while the employment sector also slowed down. However, the report noted that there was a slight increase in confidence over the next six months.
The Empire State Manufacturing Index is a widely-followed indicator of the health of the manufacturing industry in New York, and by extension, the broader US economy. The lower-than-expected reading for May suggests that the industry is facing significant challenges.
Manufacturing has been one of the bright spots in the US economy in recent months, with the sector rebounding strongly from the pandemic-induced slowdown in 2020. However, the latest report from the New York Fed is a reminder that the industry is not immune to the challenges posed by the ongoing pandemic and global economic uncertainty.
The report also highlights the need for continued government support for the manufacturing industry, particularly in the form of stimulus measures and investment in infrastructure. Such measures can help to boost demand for manufactured goods and support employment in the sector.