Manufacturing activity in New York State remained in expansion territory in February, and firms reported their strongest capital spending plans in years—an upbeat signal that executives see the recent pickup as durable.
The New York Federal Reserve’s Empire State general business conditions index came in at 7.1 in February, little changed from January and marking the fourth positive reading in five months. New orders stayed in positive territory, indicating demand continued to firm even as shipments cooled back to roughly flat after a strong showing in January.
Where the report turned notably brighter was in investment intentions. The capital expenditures index rose eight points to 18.2, a multi-year high, pointing to a strengthening in planned spending on equipment and facilities.
Labor indicators also improved after weakening the prior month. The number of employees index rose to 4.0 from January’s negative reading, while the average workweek moved up to 2.1, suggesting a modest increase in staffing and hours.
Measures of pipeline pressure also pointed to steadier momentum. Unfilled orders climbed to 9.1, indicating growing backlogs that can support production in coming months, while delivery times edged higher. New orders remained in positive territory at 5.8, though shipments cooled back to roughly flat, a pullback that likely reflects February’s harsh winter weather and heavy snowfall across the region rather than any underlying weakness in demand.
Looking ahead, firms grew more optimistic. The index for future business conditions increased to 34.7, with respondents expecting new orders and shipments to rise and employment to grow over the next six months.
“Manufacturing activity continued to expand modestly in New York State in February. Firms remained optimistic that conditions would continue to improve, with employment expected to grow,” said Richard Deitz, an economic research advisor at the New York Fed.
Price pressures picked up, with both input costs and selling prices rising faster, according to the survey.
New York’s factory sector is participating in the national trend that Trump administration officials describe as a “manufacturing rebirth.” Howard Lutnick, the U.S. Secretary of Commerce, attended a January groundbreaking ceremony for the new Micron Technology Inc. semiconductor manufacturing facility in Clay, New York. Micron has said it plans to create 9,000 new jobs with the company and over 40,000 jobs in supporting industries tied to the project.
Read the full article here