The New York Empire State Manufacturing Index experienced a significant decline in October 2024, falling to -11.9 from 11.5 in September. This sharp drop surprised analysts, who had predicted a much more modest dip to 3.8.

Key Indicators Show Contraction

The negative reading marks the worst performance since May and signals a renewed contraction in manufacturing activity across New York State. Several key metrics point to this downturn:

New orders dropped 20 points to -10.2, while shipments fell by 21 points to -2.7. Both figures highlight weakened demand and slowed production.

The inventories index decreased by 8 points to -7.5, indicating a reduction in stock levels. Similarly, the supply availability index fell by 5 points to -7.5, suggesting a further tightening in supply chains.

The delivery times index slipped to -3.2, reflecting slightly shorter delivery times. While this may appear positive, it often suggests that demand has fallen, reducing pressure on supply chains.

Labor Market Sees Modest Improvement

In contrast to the negative manufacturing data, the labor market showed slight improvement. Both employment and the average workweek saw small increases, marking the first uptick in these areas in over a year. Despite the contraction in manufacturing, the improved labor market offers a glimmer of hope for the broader economy.