Conditions for New York manufacturers declined at a modest pace in the month of November, the Federal Reserve Bank of New York revealed in a report on Thursday, with the general business conditions index remaining negative for the fourth consecutive month.
The report said the general business conditions index rose to a negative 5.2 in November from a negative 6.2 in October, although a negative reading indicates a continued contraction in regional manufacturing activity. Economists had expected the index to climb to a negative 5.0.
However, the New York Fed noted that 100 percent of firms in the New York City area reported some reduction in activity as a result of Superstorm Sandy.
The most widely cited factors contributing to a reduction in business activity were loss of power and loss of communications, the New York Fed said.
Peter Boockvar, managing director at Miller Tabak, said, "Bottom line, we'll have to carve out business activity in the Northeast in the midst of the storm aftermath to get a better overview of national activity."
The report showed that the new orders index climbed to a positive 3.1 in November from a negative 9.0 in October, indicating a turnaround by new orders. With the increase, the new orders index turned positive for the first time since June.
The shipments index also returned to positive territory following a month in negative territory, climbing to a positive 14.6 from a negative 6.4.
On the other hand, the number of employees index tumbled to a negative 14.6 in November from a negative 1.1 in October, suggesting that labor market conditions were noticeably weaker.
The report also showed that the inventories index dropped to a negative 12.4 in November from a negative 2.2 in October.
With regard to inflation, the prices paid index fell to 14.6 in November from 17.2 in October, while the prices received index climbed to 5.6 from 4.3.
The New York Fed also said its future general business conditions index fell for the second consecutive month, sliding to 12.9 in November from 19.4 in October. With the decrease, the index fell to its lowest level since March of 2009.
by RTT Staff Writer
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