More bad news on manufacturing

The Empire Manufacturing Index provides an early look at manufacturing during the current month. It’s a sliver of the sector since it deals with New York state only and it can be volatile, but again, it gets attention because it’s first.

Unfortunately, the sector received some bad news as the Empire survey showed the industry contracted for the first time since November 2010, falling from 11.9 in May to –7.8 in June.

Empire Manufacturing Index

Source: NY Fed

More bad news: new orders and shipments both fell sharply and both fell into negative territory.





About the only good news, which in essence is a reflection of weaker conditions, showed up in the prices portion of the report.


Source: NY Fed

Slower growth is relieving some of the upward pressure on commodities, and manufacturers are finding it increasingly difficult to pass along higher costs because of slower demand.

The ISM Manufacturing Index for May confirmed the sluggishness in the once hot sector and early signs from the current survey suggest continued weakness.

But this is a narrow look at goods producers, and we’ll get a better picture tomorrow when the Philly Fed survey is released.