NYS Manufacturers Report Increased Business Activity
Randy Wolken, President & CEO
The Federal Reserve Bank of Buffalo reported the results of its survey of manufacturers for April. It contains good news regarding business activity. Business activity increased in New York State for the first time in five months, according to those firms responding to the April 2023 Empire State Manufacturing Survey. The headline general business conditions index shot up significantly to end in positive territory. Also, new orders and shipments surged. Delivery times held steady, and inventories moved higher. Despite the increase in activity, employment and hours worked declined for a third consecutive month. It appears manufacturers are increasing efficiency and using overtime to hedge their futures with the possibility of economic headwinds ahead and difficulties finding skilled labor. Looking ahead, businesses continue to expect little improvement in conditions over the next six months.
Let’s do a deeper dive into the manufacturing activity of New York State manufacturing. According to the April survey, manufacturing activity grew in New York State for the first time in several months. This is very positive news and counters a trend over the last few months. The general business conditions index climbed, indicating a modest increase in activity. Thirty-five percent of respondents reported that conditions had improved over the month, while twenty-four percent said that conditions had worsened. New orders rose rapidly and significantly, as did shipments. The index indicated that orders and shipments reversed course after declining in recent months. The unfilled orders index remained unchanged. The delivery times held steady, and inventories grew modestly.
I see this month’s report as signaling that the manufacturing economy is stabilizing and we may not see a recession, but if we do, it may not be deep. It is only one month of data, and we will need to wait for future surveys to know more. New York State manufacturing looks solid for now, and its future growth potential is very substantial. This modest downturn has not hurt our overall prospects for significant and widespread growth in the future. The economy will go through growth and recessionary times. These are regular economic cycles. Endless growth has not historically been the case. However, significant growth in U.S. manufacturing is happening.
As I wrote in my message last week, in 2022, we had the largest capital investment in the U.S. manufacturing sector ever that topped every other industry in capital growth. Also, all the signs point to new records in capital investment for manufacturing for years to come. This is spurred by a need to bring critical industries back to this country, shorten supply chains, and address wealth creation and income growth. We must again pursue rapid manufacturing investment and development for our national and economic security needs.
MACNY is committed to helping members grow and seize the unprecedented opportunities before us. New York State is a top ten manufacturing state and has the potential to become in the top five over the next decade. This is tremendously important to our communities and the country as a whole. Let us know how we can help you understand what is happening in manufacturing and the ways we can help you grow your opportunities and operations.