Conditions for manufacturers deteriorated over August, the Federal Reserve Bank of New York’s Empire State Manufacturing Survey shows.
In August, the general business conditions index fell 13 points to -5.9, slipping below zero for the first time since October 2011. Twenty-two percent of respondents reported that conditions had improved, while 28 percent reported that conditions had worsened. The new orders index fell three points to -5.5, its second consecutive reading below zero.
The shipments index fell six points to 4.1, and the unfilled orders index inched higher but remained negative at -10.6. The delivery time index fell six points to -7.1, and the inventories index declined eight points to -8.3.
After recording a cumulative 43-point decline from March to July, the prices paid index rose nine points to 16.5 in August. The prices received index was little changed at 2.4. The index for number of employees was down slightly but remained positive; at 16.5, it pointed to a moderate increase in employment levels over the month. The average workweek index inched up to 3.5.
The future general business activity index fell for a seventh consecutive month, dropping five points to 15.2.
In a series of supplementary questions, manufacturers were asked about modifications to 2012 hiring and capital spending. Substantially more firms—roughly twice as many—made downward rather than upward revisions in their plans for the second half of the year. As for actual spending year-to-date, modest downward adjustments were made, on balance. When asked about negative influences on 2012 hiring and capital spending plans, a majority of respondents cited increased uncertainty about business prospects.
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