NY Manufacturing Reverses Bullish Trend in Dec.
NEW YORK (
) -- A four-month run of improved manufacturing conditions hit a hard stop in December, with the Empire State Manufacturing Survey of general business conditions falling 21 points, to 2.6.
The general business conditions index fell from 23.5 to just 2.6. About 24% of those surveyed in December said that conditions had improved, while 22% reported that conditions had deteriorated.
The news from the monthly survey was all around weaker, though in other areas, including new orders and shipments, posting more moderate declines. The new orders index slipped more than 14 points to 2.2, and the shipments measure declined by just under 7 points to 6.3. The unfilled orders index fell by more than 18 points to -21.1, its lowest level in nine months. In contrast, the index for delivery times held steady at -2.6, and the inventories index, at -18.4, was little changed for the third straight month.
The prices received index moved further into negative territory, suggesting that price increases are not being passed along, the survey reported. Current employment indexes slipped back into negative territory.
Survey takers said they experienced higher input prices in December, while selling prices declined.
Indeed, the prices paid index rose 9 points to 19.7, reversing a drop of similar magnitude in November. At the same time, the prices received index slipped 6.6 points to -9.2, its lowest level since August. These numbers indicate that pricing pressure has returned.
Respondents predicted that prices paid for most budget categories would increase by 2% to 3% more in 2010 than in 2009. Prices paid overall were reported to have risen by 2.5% in 2009 and were expected to rise by 4.2% next year.
What's more, only 7% of respondents saw a chance that prices paid would decline by more than 2%, whereas in last year's survey, the probability of such a decline was pegged at 19%.
Employment data was in line with the weaker outlook. Employment indexes declined for the second straight month, and notably, fell below zero for the first time in a few months.
Along with the weaker numbers, market optimism was also more muted. Future indexes signaled somewhat less widespread optimism than in recent months. The index for expected general business conditions retreated 14 points to 43.0, the lowest level it has hit since July.
-- Reported by Eric Rosenbaum in New York.
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