Manufacturing activity in New York state retreated in October after rising in September, with the headline general business conditions index falling 23.4 points to -11. The new orders index dropped 19.6 points to -10.2, after climbing to a multiyear high last month, while the shipments index fell 20.6 points to -2.7, exhibiting a decline in both orders and shipments. Unfilled orders edged down to a slightly negative reading of -2.2, while inventories shrank from 0 to -7.5, indicating inventories are in decline again. Delivery times were somewhat shorter, while supply availability deteriorated slightly.
Despite the decline in business activity, employment increased, with the index for the number of employees rising 9.8 points to 4.1. The average employee workweek also improved some, signaling a slight increase in hours worked. Input and selling price increases remained modest, as reflected in the prices paid index rising 5.8 points to 29.0 and the prices received index moving up 3.4 points to 10.8. Since prices paid continue to increase at a faster pace than prices received, manufacturers still face rising costs while operating in a weakened pricing environment.
Despite weak business conditions in October, firms felt much more optimistic about the future. The future business activity index rose 8.1 points to 38.7, a multiyear high, with nearly 55% of respondents expecting conditions to improve over the next six months. The capital spending index also reversed its losses from September, rising to 9.7 in October.