The June Empire State Manufacturing Survey indicates that manufacturing activity expanded slightly over the month. The general business conditions index fell fifteen points, but remained positive at 2.3. The new orders index declined six points to 2.2, and the shipments index fell a steep nineteen points to 4.8. Price indexes were markedly lower, with the prices paid index falling eighteen points to 19.6 and the prices received index dropping eleven points to 1.0. Employment indexes also retreated, though they still indicated a small increase in employment levels and a slightly longer average workweek. Indexes for the six-month outlook were generally lower than last month’s levels, suggesting that optimism was waning somewhat, with the future general business conditions index falling to 23.1, its fifth consecutive monthly decline.
New orders are nearly flat as are shipments. Unfilled orders are negative and have been for a year, meaning that there is no pressure on manufacturing (no backlog) at all. Inventories are now into depletion and prices paid have collapsed, so there is no pressure on suppliers either.
Nor is there pricing power — prices received is now basically flat, which means that manufacturers are facing both cost and supply price collapse. Employee growth, which was driven by rather-ridiculous (in my opinion) forward optimism, is coming in. And the workweek is flat.
On a forward basis optimism is fading fast as well.