Business conditions in the New York manufacturing region are contracting for the fifth month in a row according to the Empire State index for October which shows little change at minus 8.48 vs September's minus 8.82. Positives include new orders which at plus 0.16 show a fractional monthly gain to end two months of contraction. Shipments, at plus 5.33, show a moderate monthly gain. Also positive is employment, at plus 3.37, to indicate a mild monthly rise in the sample's workforce.
Now the negatives. Unfilled orders, at minus 4.49, are contracting for the fourth month in a row. Manufacturers in the region have been keeping shipments and employment up by working down backlogs which however are becoming increasingly thin. Inventories, at minus 8.99, are contracting for the fourth month in a row suggesting that the region's manufacturers, hit by weakness in new orders, see their inventories as too high. Delivery times, at minus 1.12, have been getting a bit shorter hinting at over capacity in the shipping sector as truck and rail firms chase fewer and fewer orders.
Pressures on both input and output prices are easing in what is also consistent with slowing conditions. Another negative is the six-month outlook which at 6.74 is down from 13.04 in the prior month and is at a new low for the recovery. This echoes other readings on sentiment, including those on consumer sentiment, that spirits are unusually depressed. The next look at this month's conditions in the manufacturing sector will be Thursday with the Philly Fed's report.