NY Fed, Philly Fed Manufacturing Surveys Show Pessimistic Outlook

Two important manufacturing surveys released this week showed a marked increase in pessimism among manufacturing firms.

NY Fed: The Empire State Manufacturing Survey showed that manufacturers have a negative outlook on their economic futures.

This month, the index for future general business conditions (i.e., what manufacturers predict will happen) dropped 20 points to -7.4. Even more strikingly, the index has nose-dived 44 points over the past three months.
Survey responses were collected April 2–9.

Slowing activity, rising prices: The survey’s headline index showed a second month of falling activity in the sector.

Though the general business conditions index regained 12 points, it still remained below zero at -8.1. Last month, the index recorded a 26-point drop.
Meanwhile, new orders and shipments also remained below zero at -8.8 and -2.9, respectively, while inventories kept expanding, with the index coming in at 7.4.
Lastly, prices have kept growing: “Both price indexes climbed for a fourth consecutive month to their highest levels in more than two years: the prices paid index rose six points to 50.8, and the prices received index rose six points to 28.7.”

Philly Fed: The Philadelphia Fed’s Manufacturing Business Outlook Survey recorded less gloominess about the future, but still showed a “subdued” outlook among manufacturers.

The diffusion index for future general activity improved by only one point, rising to 6.9 in April after dropping 22 points in March.
While 36% of firms expect to see an increase in activity during the next six months, 29% anticipate a drop in activity, and 25% forecast no change.
This survey was conducted April 7–14.

Slowing activity, rising prices: This survey’s diffusion index for current general activity plunged 39 points to -26.4 in April, hitting “its lowest reading since April 2023.”

“Nearly 39% of the firms reported decreases in general activity this month, while 13% reported increases; 41% reported no change.”
Just as in New York, the Philly survey recorded rising prices, with its prices paid index ticking up from 48.3 to 51.0—a level it hasn’t reached since July 2022. “Almost 54% of the firms reported increases in input prices.”