Manufacturing activity in New York cooled sharply this month, and readings on new orders and shipments also fell noticeably.
The New York Federal Reserve said in its monthly Empire State Manufacturing Survey that the general business conditions index dropped to 9.1 in January - its lowest level since the summer of 2005 - from 22.2 in December. The percentage of respondents saying conditions improved over the month fell from 40 percent to 34 percent, while the percentage reporting that conditions worsened rose from 17 to 25 percent.
Meanwhile, the new orders index fell to 10.3 from 22.5, and shipments fell to 16.1 from 27.6. The unfilled orders index, which had plunged to -14.6 in December, remained in negative territory in January, at -8.5. The delivery time index slipped below zero, to -5.3.
The survey revealed that the prices paid index inched higher in January, rising from 28.1 to 35.1, with 37 percent of respondents reporting an increase in prices paid. The prices received index also rose, from 13.5 to 19.2; roughly a quarter of respondents reported an increase in prices received.
The index for number of employees fell 12 points, to 6.9, its lowest level since the summer. The average workweek index dipped below zero for the first time in well over a year, continuing a pattern of monthly decline that began in September.
Future indexes suggest that while conditions for the most part are expected to improve over the next six months, the outlook has turned less favorable.
Finally, this month's survey included a series of supplementary questions in which manufacturers were given a list of various state regulations and asked to rank the ones they believed were most burdensome for their business. Workers’ compensation and state taxes were considered the most burdensome regulations by a wide margin.