Empire State manufacturing gauge hits four-year high, but price pressures rise

(Sharecast News) - Manufacturing activity across New York State grew at its highest rate in more than four years in May, according to data from the region's Federal Reserve on Friday, with new orders and shipments surging over the month.

The Empire State Manufacturing Survey, published each month by the New York Fed, showed a headline general business conditions index reading of 19.6, its highest since April 2022.

Analysts were expecting an easing of growth this month, with the consensus estimate at just 7.5, compared with the 11 reading seen in April.

The survey, which was taken between 4 and 11 May, revealed that 55% of respondents expect business conditions to improve over the next six months, with the outlook index rising 14 points to 33.5.

The new orders index rose 3 points to 22.7, while the shipments index was little changed in positive territory at 18.9.

Looking ahead, while manufacturing employment is tipped to grow and capital spending plans remained modest, prices are expected to continue to rise, with both the prices paid and input prices indices at their highest levels since 2022.

"New orders and shipments rose strongly, and employment continued to increase. However, the pace of price increases surged while delivery times and supply availability worsened," said Richard Deitz, economist research advisor at the New York Fed.